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ISLAMABAD: The Federal Government is reported to have made arrangements to meet external obligations worth $3.7 billion by the end of June.
In a statement released by the Ministry of Finance the other day, it was revealed that this amount had to be repaid during the remaining period of the current fiscal year. The statement went on to say that arrangements had been made for the rollover or repayment of this debt and that significant inflows were expected during this period. The government stated that the PMLN-led coalition government had averted default, and the economy was now on a course to stability and growth.
This announcement comes amid continuous delays to the staff-level agreement with the International Monetary Fund (IMF). It may be mentioned here that Pakistan and the IMF had been facing a deadlock for almost three months in reaching a staff-level agreement after concluding negotiations for the completion of the 9th review of the IMF programme on February 9.
Pakistani authorities have since been saying they have met all the pre-conditions and blame the Fund over unfair treatment and changing goalposts while the IMF staff had been attributing delays to confirmation of funding commitments from bilateral lenders.
As a consequence, three final quarterly reviews involving about $2.5bn worth of IMF flows have become uncertain before the programme finally reaches its terminal date of June 30. That would require the beginning of talks for a fresh fund programme at a more crucial stage when Pakistan would be in the election phase and yet require over $6bn in fresh repayments to external creditors in the first half (July-December 2023) of the next fiscal year.
Meanwhile, in a separate statement, the Chinese charge d’affaires in Islamabad, Ms Pang Chunxue, called on Finance Minister Ishaq Dar and conveyed ‘best wishes and greetings’ on behalf of Qin Gang, the State Councillor and Foreign Minister of China, who visited Islamabad recently. The finance ministry said she guaranteed the continuous support of the Chinese government to the people of Pakistan.
Despite the challenges posed by the IMF deadlock, the government’s announcement of arrangements to meet external obligations and the assurance of support from China is expected to give hope to investor, boosting their confidence.