Pakistan and IMF to hold talks on $710 million loan

The government of Pakistan is preparing for important talks over the next installment of the $710 million loan, which is a component of the $3 billion standby agreement between the International Monetary Fund (IMF) and the Pakistani government. November 2 in Islamabad is the scheduled date of these negotiations.

Despite the difficulties presented by the outside world. The Pakistani government is optimistic about the result of the negotiations and Nathan Porter will lead the IMF group.

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IMF official in Pakistan, Esther Peers, revealed that the IMF had originally proposed a date for the negotiations around November 7. Pakistan, however, asserted that it has already obtained the information needed for the negotiations. If the negotiations are successful, the next loan tranche is anticipated to be approved by the IMF board in December.

The disparity in external financing will be one of the main issues in these negotiations. The Pakistani government has projected a $4.5 billion gap in external financing, taking into account Eurobonds and commercial loans. Some experts, though, think this number might be conservative. Monetary policy and the value of the Pakistani rupee in relation to the US dollar will also be major topics of discussion.

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The value of the Pakistani rupee, which had been relatively stable for a month, has started to experience depreciation in recent days. This development is expected to be a key point of discussion. According to a federal minister, the condition to reduce the circular debt of the Power Division has already been met.

Furthermore, it’s worth noting that the IMF had previously imposed a condition to end subsidies on oil. Despite this condition, the Pakistani government has continued to offer cross-subsidies to domestic, export, and industrial gas consumers, and this approach appears to be showing promise in meeting the IMF’s requirements.

The outcome of the November 2 negotiations will hold significant implications for Pakistan’s economic stability and fiscal policies. Stakeholders are closely monitoring the developments and are awaiting further updates on the negotiations.