US urges Pakistan to continue working with IMF on economic reforms

• US says it supports Pakistan’s efforts to break free from debt cycle.
• Says incoming govt must immediately prioritise economic situation.
• Long-term health of economy crucial for stability: State Dept.

WASHINGTON: The United States on Wednesday stated that it supports Pakistan’s “efforts to break free from the vicious cycle of debt and international financing” and urged Islamabad to continue working with the international financial institutions “towards macroeconomic reforms”.

The comments were made by US State Department Spokesperson Mathew Miller when asked about the letter written by Pakistan Tehreek-e-Insaf (PTI) founder Imran Khan to the International Monetary Fund (IMF).

“So I’ll just say with respect to the IMF that we support Pakistan’s efforts to break free from the vicious cycle of debt and international financing. The long-term health of Pakistan’s government — or economy is crucial to its stability,” said the spokesperson during a press briefing.

Washington further stated that the incoming government “must immediately prioritise the economic situation” as the “policies over the next several months will be crucial to maintaining economic stability” in the country.

“And we urge Pakistan to continue working with the IMF and other international financial institutions towards macroeconomic reforms,” said Miller.

Pakistan's cash-strapped economy is struggling to stabilise after securing a $3 billion standby arrangement from the IMF last summer, with record inflation, rupee devaluation and shrinking foreign reserves.

China has rolled over a $2 billion loan to Pakistan, according to Ministry of Finance sources.

The $2 billion loan was due in March and has been extended for one year, it said.

Analysts say a new government — which PTI's opponents are expected to form — is likely to need more funds from the global lender after the standby arrangement expires in April.

'Widespread intervention, fraud'

Meanwhile, the PTI has released the letter addressed to IMF Managing Director Kristalina Georgieva.

In the letter, available with Geo News, PTI spokesperson Raoof Hasan said the February 8 general elections were subjected to "widespread intervention and fraud in the counting of votes and compilation of results".

"In view of the policies and principles the IMF stands for, there should be no doubt that the abuse of power by a small number of holders of public office to impose their likes and dislikes on Pakistan’s populace as aforesaid, and thus to ensure their continuing personal gain, would not be promoted or upheld by the IMF," Imran-led party alleged.

The IMF has yet to receive the letter, the lender said in an email to Reuters.