The IMF has linked the long awaited staff-level talks with financing assurances from the bilateral partners.
The international lender wants Pakistan to convince Saudi Arabia, Qatar, and the UAE to provide written assurances for financing.
By keeping its promises to refinance its commercial debts and roll over its SAFE deposits, only China has stepped forward so far to save Islamabad.
“Timely financial assistance from external partners will be critical to support the authorities’ policy efforts and ensure the successful completion of the review [with Pakistan],” said Julie Kozack, the IMF’s Director of Strategic Communications in a press briefing.
“Ensuring that there is sufficient financing to support the authorities is the paramount priority. A staff level agreement will follow once the few remaining points are closed,” she said and added that it is a standard feature of all programmes of the Fund.
“We do need to ensure that we have those financing assurances in place in order for us to be able to take the next step with Pakistan,” Kozack maintained.
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The representative noted that “authorities are committed to implementing the necessary reforms.
“They have started to implement decisive actions to stabilise the economy and restore confidence. While providing space to accommodate the needs related to the floods, including through an increase in social assistance which is aimed at the most vulnerable,” she said.
Cash-strapped Pakistan must act quickly to implement the necessary steps to strike an agreement with the IMF.
The conclusion of the ninth review of a $7 billion loan program, which has been postponed since late last year due to a policy framework, would result in the payout of $1.2 billion as well as the opening of inflows from friendly nations.
Pakistan is the only South Asian country that’s yet to secure a bailout from the International Monetary Fund as Sri Lanka clinched financing this week and Bangladesh pushes on with carrying out IMF-mandated reforms.