The International Monetary Fund (IMF) managing director was informed of the government’s determination to fulfil the conditions of the IMF’s plan, according to Prime Minister Muhammad Shehbaz Sharif, who made the statement on Saturday.
The prime minister claimed on Twitter that he spoke with the IMF MD over the phone on Friday. “I also explained Pakistan’s economic difficulties, especially after the devastating floods. IMF delegation will come to Pakistan soon,” he continued in a tweet.
Prime Minister Shehbaz Sharif received a phone conversation from Ms Kristalina Georgieva, the IMF’s managing director, on Friday, in which she reaffirmed her commitment to supporting Pakistan during this challenging time. Additionally, she conveyed her profound compassion and worry for the losses of life and property caused by the most recent floods.
The managing director was invited to attend the Geneva conference on a climate-resilient Pakistan after the prime minister commended her for her concern about the effects of the floods. The IMF MD thanked the prime minister for the invitation but let her know that she would only be able to participate remotely because the IMF Board meetings were scheduled for Monday and Tuesday.
In 2019, Pakistan signed up for a $7 billion IMF programme, which was later increased to $6 billion. The ninth evaluation of the programme, which would release $1.18 billion, is still pending. It was previously delayed for two months because the PML-N-led government refused to agree to some requirements put forth by the Fund, and the issues still haven’t been resolved.
Pakistan’s depleting foreign reserves
The State Bank of Pakistan’s (SBP) foreign exchange reserves fell to an eight-year low of $5.576 billion for the week ended on December 30, 2022, signalling the serious cash shortage the nation is currently experiencing.
Due to this decrease, the government was unable to repay its international debts without taking out new loans from allies.
Finance Minister Ishaq Dar is optimistic that the rapidly declining SBP reserves can be reversed with the anticipated financial assistance provided by the friendly countries, although nothing has been realised thus far.
For the purpose of paying off external debt, $245 million of the SBP’s foreign exchange reserves were expended throughout the week.