On Tuesday evening, virtual discussions took place between representatives of the Ministry of Finance and the mission of the International Monetary Fund (IMF), which focused on the critical issues of external financing and income generation.
Despite ongoing negotiations, no deadline has been set for approval of the loan by the IMF’s Executive Board, according to sources familiar with the matter.
During the meeting, representatives of the Ministry of Finance informed the IMF mission about the government’s efforts to secure external financing. This included updates on credit transfers and new financial commitments from friendly countries. Media reports revealed that a timeline has been provided to the IMF, with the loan rollover expected to be completed by next week.
The IMF mission stressed the importance of repaying over $12 billion in debt before the loan could be approved by the Executive Board.
The virtual talks also included officials from the Federal Bureau of Revenue (FBR) who spoke to the IMF team about the revenue shortfall. The IMF mission expressed the need for the FBR to meet its revenue targets for the month. In response, the IMF asked the FBR for a detailed plan to bridge the deficit gap and ensure revenue targets are met.
In addition to discussions about external financing, sources indicate that the Ministry of Finance is actively negotiating with commercial banks to secure new financing. Negotiations are reportedly underway with four different sources for commercial loans, which are expected to contribute to the government’s broader financial strategy.
On Tuesday, Finance Minister Muhammad Aurangzeb revealed that the IMF has no objection to the introduction of targeted subsidies. These subsidies, he said, could be distributed to eligible beneficiaries through the Benazir Income Support Program (BISP).
To ensure uniformity, the minister said discussions will be held with chief ministers this week to implement a uniform policy at the national level. He was speaking to the media in an informal discussion in Parliament.
Responding to concerns about external funding, Aurangzeb revealed a gap of US$2 billion and noted that negotiations were at an advanced stage to bridge the shortfall. He emphasized the importance of securing commercial loans.
“At the moment, it is necessary to secure an agreement on commercial loans, not exactly on their issuance,” he added, stressing that the negotiations on the rollover of the debt are in the final stage and are progressing positively. The minister assumed that relevant institutions from allied countries would soon inform their governments about this development.
