Pakistan ‘very close’ to signing IMF agreement: Finance Minister

Pakistan’s Finance Minister Ishaq Dar said on Thursday his country was “very close” to signing a staff level agreement with the International Monetary Fund, which would offer a critical lifeline for taming a balance of payment crisis. An agreement would release $1.1 billion to the cash-strapped South Asian economy. “We seem to be very close to signing the staff level agreement, hopefully, God willing, in the next few days,” Dar said at a seminar in Islamabad. “I and my team are absolutely committed to complete this program to the best of our ability,” he said, adding: “We have been in the review and I think it has taken longer than it should have in my opinion.” Islamabad has been hosting an IMF mission since early February to negotiate the terms of a deal, including the adoption of policy measures to manage its fiscal deficit ahead of the annual budget due around June. The funds are part of a $6.5 billion bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations. Dar said the current crisis was deeper and more complex than the two prior experiences he had overseen as finance minister, but he was confident the economy would be pulled out of the “quagmire”. He said reforms in the energy sector, which has piled up more than four trillion rupees ($14.18 billion) in debt, were the most critical to get the economy back on track. “The power sector has to be structurally reformed and fixed and let me endorse that the issue was and has been very grave,” he said. The IMF deal would unlock other bilateral and multilateral financing avenues for Pakistan to shore up its foreign exchange reserves, which have fallen to just four weeks’ worth of import cover. Islamabad has met most of the lender’s demands to clear the review. The last one yet to be fulfilled on the list is an assurance on external financing to fund its balance of payment gap for the current fiscal year, which end