Pakistan again seeks US help in unlocking IMF funds

• Dar made no commitment to US envoy about lowering taxes.
• Promises to review request during budget-making exercise.
• If IMF's no-action policy continues, programme will end in smoke.

ISLAMABAD: Demonstrating its desire for the completion of the ongoing International Monetary Fund (IMF) programme, Pakistan has once again approached the US to convince the Washington-based money lender to strike the staff-level agreement post-haste.

The issue came under discussion during a meeting between US Ambassador Donald Blome and Minister for Finance and Revenue Ishaq Dar, according to a The News report published Saturday.

Sources told the publication that the finance minister informed the US envoy that the ongoing programme of Extended Fund Facility (EFF) was going to expire on June 30, 2023. Therefore, the IMF would have to take a decision for the completion of the pending 9th Review under the EFF programme.

"If the policy of no action continued on the part of the IMF, the programme will end in smoke."

Meanwhile, Donald Blome requested a reduction of the tax burden on certain US companies operating in the country — especially those related to the beverages sector.

Dar — in the presence of the Special Assistant to PM on Revenues — did not make any commitment.

However, he promised to review the request during the budget-making exercise.

In a statement, the finance ministry on Friday said: "H.E. Mr.Donald Blome, Ambassador of the United States of America to Pakistan called on Finance Minister Senator Mohammad Ishaq Dar and exchanged views on matters of mutual interest and enhancing bilateral economic, investment and trade relations between the two countries."

The minister shared economic policies and priorities of the government to address the challenging economic environment and bring about economic stability and growth, it added.

It said the two sides exchanged views on matters of mutual interest and enhancing the existing bilateral relations between both countries. 

Dar informed the US envoy about the government’s pragmatic plans related to revenues and expenditures for meeting its national as well as international financial obligations and shared various economic avenues in which both countries can further deepen their economic relations, it added.

“The finance minister also informed the envoy about the ongoing IMF programme and assured the dedication of the government to complete the programme,” the statement said.

Currently, Pakistan is making last-ditch efforts with the IMF to revive the stalled EFF programme.

The hopes are diminishing each day mainly because the ongoing programme of $6.5 billion under the EFF will expire on June 30.

Islamabad is still contemplating ways to meet other repayment deadlines as the country has about $3.7 billion in overseas debt due this month and in June against its current foreign exchange reserves of just $4.3 billion.

According to a Financial Times report, the cash-strapped nation is looking towards China to roll over more than $2 billion in debt due next month.

Two senior officials told the publication that Beijing had committed to help the country meet two crucial debt repayments in June worth $2.3 billion by providing fresh funds immediately after Pakistan makes the payments.

"The refinancing of the commercial loans worth $1.3 billion and a Chinese government loan of $1 billion would help Pakistan avert immediate default," the officials said.