General Qamar Javed Bajwa, Chief of Army Staff, contacted Saudi Arabia and the United Arab Emirates on Friday to request that the stalled IMF loan be released sooner.
Army Chief General Bajwa met with officials in Saudi Arabia and the UAE to discuss the IMF program, which has been on hold since early this year.
There is hope that good news will arrive soon.
According to reports, the IMF on Tuesday conditionally approved the $1.2 billion loan tranche in late August on Pakistan’s ability to timely secure ‘adequate assurances’ from friendly countries for additional loans to bridge the financing gap, exposing Islamabad to demands from its bilateral creditors.
In a brief statement, IMF Resident Representative Esther Perez stated that “the last prior action for the combined 7th and 8th reviews has been met with the increase in PDL (Petroleum Development Levy) on July 31.”
The merger will allow for the release of nearly $1.2 billion in tranches, as opposed to the original schedule of $2 billion.
However, Esther did not provide a confirmed board meeting date because the IMF sees a gap against Pakistan’s gross external financing requirements.
“The board meeting is tentatively scheduled for late August once sufficient financing assurances are confirmed,” Esther Perez said.
Earlier, on July 29, Chief of Army Staff General Bajwa appealed to the US to assist Islamabad in securing an early disbursement of an IMF tranche. The Foreign Office confirmed on Friday that General Bajwa had contact with US Deputy Secretary of State Wendy Sherman.
According to Nikkei Asia, Gen Qamar Javed Bajwa spoke by phone with US Deputy Secretary of State Sherman earlier this week, in a highly unusual move, according to sources in both the US and Pakistan.
According to the sources, who spoke on the condition of anonymity because they were not authorized to speak publicly, Bajwa requested that the White House and Treasury Department press the IMF to immediately supply nearly $1.2 billion that Pakistan is due to receive under a resumed loan programme.
On July 13, the IMF granted Pakistan “staff-level approval” for the loan in question. However, the transaction, which is part of the IMF’s $6 billion Extended Fund Facility for Pakistan, will not be processed until the IMF’s executive board gives final approval.
The IMF will be on vacation for the next three weeks, and its board will not meet again until late August. According to an IMF official who spoke on the condition of anonymity, no firm date has been set for announcing the loan approval for Pakistan.
Time is of the essence for Islamabad in order to halt the depreciation of the Pakistani rupee against the US dollar in interbank trading.
Without an immediate lifeline, Pakistan’s inflation-ravaged economy will continue to bleed. The rupee has been falling against the dollar, and the country now has less than $9 billion in foreign reserves, enough to cover two months of imports. S&P Global downgraded Pakistan’s outlook to negative from stable on Thursday.
