Pakistan’s Prime Minister Shahbaz Sharif approved a deal with the International Monetary Fund (IMF) and all matters over the bailout programme are settled, local broadcaster Geo said on Thursday, citing sources.
The country was expected to finalise negotiations with the IMF on Thursday on a $6.5 billion bailout package to avert an economic meltdown as it tumbled from one crisis to another in recent months.
Pakistan-IMF agreement
To release the funds, the IMF needed to reach a staff level agreement with Pakistan, Reuters reported.
The Geo report did not specifically mention whether a staff level accord had been approved.
Reuters said the Pakistan Information Minister’s office did not immediately respond to its request for a comment on the issue.
Analysts say the money is necessary to prevent Pakistan from defaulting on external payment obligations, and an IMF deal also paves the way for other organisations and governments to provide funds.
Finance Minister Ishaq Dar was earlier quoted by Dawn newspaper as saying “it is expected matters will be settled today”.
The IMF mission arrived in Pakistan late last week for talks aimed at releasing an overdue tranche of $1.1 billion from the bailout programme, leaving $1.4 billion remaining. The programme is due to end in June.
The IMF funding is crucial for the country’s $350 billion economy, which is facing a balance-of-payments crisis with foreign exchange reserves dipping to less than three weeks of import cover.
Last week, Sharif called the country’s economic situation “unimaginable”. The fiscal adjustments demanded by any deal, however, are likely to fuel record-high inflation, which hit 27.5 percent year-on-year in January, analysts say.
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