Pakistan’s Finance Minister Ishaq Dar has announced that his country is close to signing a staff level agreement with the International Monetary Fund (IMF), which would provide a critical lifeline for the country’s balance of payment crisis.
The agreement would release $1.1 billion to the cash-strapped South Asian economy. Dar stated that he and his team are committed to completing the program to the best of their ability. Islamabad has been hosting an IMF mission since February to negotiate the terms of a deal.
The funds are part of a $6.5 billion bailout package the IMF approved in 2019, which analysts say is crucial if Pakistan is to avoid defaulting on external debt obligations.
Reforms in the energy sector, which has accumulated more than four trillion rupees ($14.18 billion) in debt, are critical to getting the economy back on track, according to Dar.
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.
($1 = 282.0000 Pakistani rupees)