IMF is having trouble unlocking a stalled bailout package for crisis-hit Pakistan because the lender has proposed a new requirement before signing a staff-level agreement.
The US-based financial institution has demanded a written guarantee of financing by June 30 from friendly nations including Saudi Arabia, Qatar, and the United Arab Emirates after placing extremely stringent conditions on the use of bailout funds.
According to the government, the executive directors of the KSA and other countries at the IMF will provide written assurance. The Finance Ministry and the PM House discussed how to obtain written assurance from these countries in this regard.
Nearly all of the lender’s requirements have been met by the cash-strapped nation, which also increased power and gas prices and imposed Rs200 billion in taxes as part of a mini-budget.
Islamabad concurred with the latest lender requirement not to obtain direct loans from commercial banks.
The staff-level agreement will be signed by Pakistan in the coming days, according to Prime Minister Shehbaz Sharif, despite ongoing delays. According to experts, political unrest in South Asian countries has played a significant role in the delay of a deal that is urgently needed to stabilize the economy. Months of ongoing negotiations have gone by without a resolution.