The International Monetary Fund (IMF) has welcomed the Pakistan government's commitment to enforce policies needed to defend the macroeconomic stability and added that virtual talks would continue towards reaching a deal that would unlock $1.1 billion in stalled funds that could help the country from going bankrupt and default on its debt.
Officials from the Washington-based lender held discussions with Pakistan's authorities during a visit to Islamabad from January 31 to February 9 as part of the fund's financial assistance programme to the cash-strapped country.
“The IMF team welcomes the Prime Minister’s commitment to implement policies needed to safeguard macroeconomic stability,” Nathan Porter, who led the IMF mission to Pakistan, said on Friday.
“Considerable progress was made during the mission on policy measures to address domestic and external imbalances,” Porter said. “Virtual discussions will continue in the coming days to finalize the implementation details of these policies.”
The IMF funding is critical for the country's $350 billion economy, which is facing a balance-of-payments crisis as it tries to service high levels of external debt.
The fund's key requirements from the country include strengthening the fiscal position with permanent revenue measures and reduction in untargeted subsidies, while scaling up social protection to help the most vulnerable and those affected by the floods.
IMF also wants the exchange rate to be market determined to gradually eliminate the foreign exchange shortage.
In addition to the stalled tranche, another $1.4 billion remains of the $6.5 billion bailout programme, which is due to end in June.
(Writing by Brinda Darasha; editing by Seban Scaria)