Virtual discussions between officials from the Finance Ministry and the International Monetary Fund (IMF) mission took place on Tuesday evening, focusing on critical issues of external financing and revenue generation.
Despite the ongoing negotiations, no deadline has been established for the approval of the loan by the IMF's Executive Board, according to sources familiar with the matter.
During the talks, Finance Ministry officials briefed the IMF mission on the government's efforts to secure external financing. This included updates on loan rollovers and new financing commitments from friendly countries. Sources revealed that a timeline has been provided to the IMF, with expectations for loan rollovers to be completed by next week.
The IMF mission emphasized the importance of rolling over $12 billion in debt before the loan can be approved by the Executive Board.
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The Federal Board of Revenue (FBR) officials were also part of the virtual talks, talking to the IMF team about the revenue shortfall. The IMF mission has expressed the need for the FBR to meet its revenue targets for this month. In response, the IMF has requested a detailed plan from the FBR to bridge the gap caused by the shortfall and ensure that revenue targets are met.
In addition to the discussions on external financing, sources indicate that the Finance Ministry is actively engaged in talks with commercial banks to secure fresh financing. Negotiations are reportedly underway with four different sources for commercial loans, which are expected to contribute to the government's broader financial strategy.
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On Tuesday, Finance Minister Muhammad Aurangzeb revealed that the IMF had no objections to implementing targeted subsidies. These subsidies, he said, could be distributed to eligible recipients through the Benazir Income Support Programme (BISP).
To ensure uniformity, the minister indicated that discussions would be held with chief ministers this week, aiming to apply a consistent policy nationwide. He was speaking to the media in an informal discussion in parliament.
Addressing concerns over external financing, Aurangzeb disclosed a $2 billion gap and noted that negotiations are at an advanced stage to bridge this shortfall. He emphasized the importance of securing commercial loans.
"There is a need to secure an agreement for commercial loans at this time, not exactly their issuance," he added, stressing that talks for debt rollover are in their final stages and progressing positively. The minister anticipated that relevant institutions from allied countries would soon update their governments on these developments.
