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Pakistan and IMF reaches agreement to revive $6 bln funding programme

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Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at wnobserver.com

Pakistan and the International Monetary Fund reached an agreement Monday to revive a stalled $6 billion funding program for Pakistan which is facing mounting economic challenges.

The International Monetary Fund said – in a statement – that “the Pakistani authorities and IMF have reached an agreement at the staff level on the policies and reforms needed to complete the sixth review.”

According to the statement by the International Monetary Fund statement, the two sides reached an agreement on taking the necessary steps to complete the sixth pending review of the Pakistani economy, laying the groundwork for Parliament’s approval of new legislation to secure a loan of just over $1 billion.

IMF indicated that Pakistan is still only halfway to obtaining a loan of one billion dollars, as the approval of the Executive Board of the International Monetary Fund is formally linked to the implementation of the preconditions, which have already been set by the financial advisor Shaukat Tarin and also confirmed by the International Monetary Fund, stressing that “the agreement is subject to Executive Board approval after prior actions have been implemented, particularly with regard to financial and institutional reforms.”

Pakistan entered the $6 billion, 39-month funding programme with the IMF in July 2019, however, the funding stalled earlier this year due to issues over required reforms.

Ahead of the IMF announcement, the central bank last week warned that a higher than expected primary deficit would likely worsen the inflation outlook and undermine economic recovery.

The central bank also raised its benchmark interest rate by 150 basis points to 8.75% to counter inflationary pressures and preserve stability with growth.

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