Pakistan's final round of talks with the International Monetary Fund (IMF) on an economic review commenced today, following a one-day extension granted yesterday in the negotiations.
Sources in the Finance Ministry said that these discussions are poised to particularly focus on a letter of intent and the finalization of the draft Memorandum of Economic and Financial Policies.
According to statements from the Ministry of Finance, the negotiations have progressed positively, and there are no deadlocks or obstacles to their success. The talks, originally scheduled from March 14 to 18, are progressing towards their conclusion in a constructive and positive manner, the ministry sources said.
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They further said Pakistan has taken timely and serious steps in meeting the goals set by the IMF, assuring the continuation of economic reforms. Upon the successful conclusion of negotiations, a staff-level agreement between Pakistan and the IMF would be signed, while the country has assured the IMF of the continuation of economic reforms.
This agreement would pave the way for the release of the final tranche of $1.1 billion under the $3 billion standby arrangement. Pakistan has already received $1.9 billion from this arrangement. The IMF Executive Board will be recommended to release the tranche for Pakistan.
The agreement between the two sides for the last installment could not be reached within the stipulated period on March 18, therefore the negotiations were extended by a day till today.
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According to the authorities, Pakistan has fulfilled all the conditions of the IMF. By accepting the condition of a strict monetary policy, the policy rate has also been maintained at 22%, they added.
Pakistan has assured the Fund of concrete reforms in the energy and taxation sectors. The IMF has also sought further clarification on arrangements for external financing. There is a possibility of a staff-level agreement being signed after brief talks today, as well as the IMF negotiating a new loan program.
Pakistan and IMF will finalize the letter of intent after further discussions. The IMF Executive Board will give a formal approval to the possible agreement in April. Regular talks with the IMF on the new loan program will also be held in Washington next month.
