Pakistan reached staff level agreement with IMF

 Pakistan is expecting to receive $1.2 billion tranche from IMF 

Pakistan and IMF have reached a staff level agreement to resume the IMF Programme. The finance ministry sources have confirmed the development.  The IMF is likely to issue a formal statement in this regard tonight or tomorrow.

But government sources connected with the talks tell that an agreement has finally been reached and the fund will issue a statement during working hours in Washington DC on Wednesday. The first tranche is expected to be SDR894 million, equal to $1.2 billion. The program has been extended till July 2023, and total program size increased by $1bn to reach $7bn.

The talks had dragged on over questions on the revenue plan, power tariff adjustments, the question of those Independent Power Producers (IPPs) whose tariff has not been renegotiated, the fiscal surplus that the provinces are expected to run, and the quarterly fiscal targets.

“The MOU with the provinces has been signed and shared with the fund” a finance ministry source told a media outlet. Agreement on all the other issues was clinched last night. The government is now expecting an announcement from the IMF by later tonight.

Pakistan has fulfilled most of the IMF conditions to resume the program. Pakistan is looking to get tranche from IMF to stablise the falling Rupee against US dollar. Pakistan needs to strengthen its fast depleting foreign reserves.  

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