ISLAMABAD: Finance Minister Miftah Ismail said the government has sent the letter of intent (LoI) back to the International Monetary Fund (IMF) after fulfilling the pre-requisites.
He said that all the upfront formalities have been completed and IMF board is expected to hold its meeting on Aug 29 to give approval for the resumption of loan to Pakistan.
Talking to journalists in Islamabad on Wednesday, Miftah said that the LoI, received on August 12 from the IMF, has been sent to the lender after he and State Bank of Pakistan (SBP) Acting Governor Murtaza Syed signed the document.
The IMF suspended its programme in February 2022 when the PTI-led government announced untargeted fuel and electricity subsidies. PTI government did it soon after getting approval on completion of the sixth review and release of $1 billion tranche from the IMF amid rumours that a no-confidence move was being tabled against Imran Khan.
Consequently, the coalition government was left with no other choice but to fulfill all the upfront conditions of the IMF to get loan as the SBP’s reserves fell below $8 billion.
The challenging situation would persist because Pakistan would have to build up its foreign currency reserves to avoid the emergence of a default-like situation. It seems that after the completion of the ongoing EFF programme in June 2023, Pakistan would have to seek another IMF programme in the next fiscal year.
In response to a question, the finance minister said that no decision has been taken about introducing new taxes through an ordinance. “The prime minister will make a final decision in this regard.”
