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PAKISTAN, IMF FAIL TO REACH STAFF-LEVEL AGREEMENT g
FINANCE SECRETARY SAYS SOME POINTS YET TO BE SETTLED BETWEEN PAKISTAN, FUND ISLAMABAD
P
SHAHZAD PARACHA
AKISTAN and the International Monetary Fund (IMF) have failed to reach a Staff Level Agreement even after ten days of crucial talks. Secretary Finance told the media late Thursday night that the negotiations
with the IMF have been completed. He said that the IMF team has assured us of striking a staff-level agreement in the coming days as there are some points to be settled between Pakistan and the IMF, which will be decided by the Washington office of IMF explaining that the Fund team wants to further elaborate some agreed points with their high ups. He also said that both sides reached
g
SAYS IMF PARTIALLY HANDED OVER MEMORANDUM OF ECONOMIC POLICIES
agreement on prior actions, without explaining the numbers of prior actions. Hamid Yaqoob said that We (IMF team in Pakistan and the Finance ministry) are waiting for an IMF statement which will be released by the lender’s US office. The Secretary Finance said that the IMF has partially handed over the Memorandum of Economic Policies (MEFP) as we discussed all the points in detail.
On a question, he replied that the IMF team has also assessed the sources of foreign inflows but they are satisfied with our working or assurances. Earlier, it was reported that the IMF expressed its unease over the projections made by the Ministry of Finance over external financing inflows from multilateral, bilateral creditors and in the shape of commercial loans. The IMF’s loan is critical for the coun-
try’s dwindling economy as the State Bank of Pakistan (SBP)-held foreign exchange reserves have fallen to $2.91 billion. The IMF team on the request of the Pakistani government visited Islamabad and negotiations continued for 10 days. Earlier, Briefly talking to the media after ‘Road Safety Conference for Parliamentarian, Ishaq Dar has expressed the hope that there would be positive outcome on ongoing talks with the IMF on 9th review. Things are going on the right track and I am hopeful that negotiations will be completed today, he claimed.
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Dar claims ‘all good’ with IMF as meltdown nears PROFIT REPORT As talks between the federal government and the International Monetary Fund (IMF) entered final and decisive stages in the late hours on Thursday, finance minister Ishaq Dar has said good news is on the offing. And of all the places for this reassurance to have come, it was a road safety conference for parliamentarians in Islamabad. The finance minister was supposed to speak about the plans that the government has for the National Highway Authority (NHA) and about road safety but the tension in the conference hall was palpable — and Dar had to speak about the elephant in the room. “Everything is going alright,” he said in response to a question on how the discussions with the visiting IMF delegation were going. “The final round is going on right now. I meet them (IMF team) every day and will today as well. “It is expected matters will be settled today,” Dar said. “We will give you the news very soon.” Things have been tense in the country over the past few weeks with reserves falling to dangerous levels as the government desperately fights off sovereign default. While the IMF program had been on track a few months ago, things have taken dramatic turns since Dar assumed the chiefdom of Q-
block and entered a Mexican Standoff with the fund. On the same day, Pakistan’s foreign exchange reserves held by the central bank decreased by $170 million to $2.9 billion. A successful outcome with the IMF would also help to release money from other platforms that are looking for a greenlight from the lender. The SBP handout issued today said that the decrease was due to “external debt payments”. Meanwhile, net foreign reserves held by commercial banks stood at $5.6bn, bringing the country’s total liquid foreign reserves to $8.5bn. Arif Habib Ltd calculated that reserves were at their lowest since February 2014 and cover a little more than two weeks of imports. The total liquid foreign reserves left with the country, including the net reserves with the banks now stand at $8.54 billion. Taking into account the controlled imports for the last two months, and a landslide
depreciation of the Rupee in the last 15 days, Pakistan’s current import cover now stands at close to 2 weeks of imports. For the last one month, each week relays a new figure for the lowest amount of reserve level that the SBP forex reserves have touched, in the last 8 years. However, at $2.92 billion, Pakistan no longer has the room to slide lower. On 7th February 2014, Pakistan’s foreign reserves were at $2.84 billion, which is the only time Pakistan’s reserves were below the current level. It is also important to note that with the current value of the greenbacks, both against the PKR and by itself, makes the current level of reserves, the lowest ever in at least the last 2 decades, in real terms. Last week, the dollar dropped a whopping $592 million, bringing the SBP reserves to $3.09 billion. Briefly talking to the media after ‘Road Safety Conference for Parliamentarians, he said that things are going on the right track and I am hopeful that negotiations will be completed today. Earlier, addressing the audience at the conference, the pressure on road infrastructure is increasing because other means of transport are relatively inefficient. Hence, ensuring effective road safety measures are essential for socio-economic development.
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Pakistan’s foreign reserves down by $170m to $2.9b ISLAMABAD STAFF REPORT
Pakistan’s foreign exchange reserves held by the central bank decreased by $170 million to $2.9 billion in the week ending on February 3, the State Bank of Pakistan (SBP) said on Thursday. The country is locked in negotiations with the International Monetary Fund (IMF) to release muchneeded money under a stalled bailout programme. A successful outcome with the IMF would also help to release money from other platforms that are looking for a greenlight from the lender. The SBP handout issued today said that the decrease was due to “external debt payments”. Meanwhile, net foreign reserves held by commercial banks stood at $5.6bn, bringing the country’s total liquid foreign reserves to $8.5bn.
Arif Habib Ltd calculated that reserves were at their lowest since February 2014 and cover a little more than two weeks of imports. Earlier in the day, Finance Minister Ishaq Dar said that matters between the government and the IMF were expected to be settled today. Cash-strapped Pakistan has been holding talks with the IMF in a bid to unlock funds from a $7 billion bailout designed to ward off an economic meltdown. The talks are meant to clear the IMF’s 9th review of its Extended Fund Facility, aimed at helping countries with balance-of-payments crises. The lender had set several conditions for resuming the bailout, including a market-determined exchange rate for the local currency and an easing of fuel subsidies. The central bank recently removed a cap on exchange rates and the government raised fuel prices by 16 per cent.