IMF to reconsider Pakistan for loan
Originally scheduled for today, an International Monetary Fund board meeting reviewing the release of IMF funds to Pakistan has been delayed to late January.
The IMF agreed in November 2021 to provide Pakistan with a $6 billion bailout, so long as Pakistan complies with certain conditions, foremost among which are the enshrinement of central bank autonomy in law and fiscal tightening measures. Opponents in Pakistan’s parliament, however, have so far prevented the passage of these measures.
On Monday, the country’s finance ministry requested a delay from the IMF of several weeks in the hope that the parliament might approve the measures by the end of the month. If it does so by the time of the delayed review, the IMF will release $1 billion for immediate use by the Pakistani government.
Prime Minister Imran Khan’s ruling coalition holds a majority of the seats in parliament, with most coalition members belonging to his own party, making it unlikely that the opposition will be able to do much more than delay the passage of these measures. A subsequent successful review will strengthen the Pakistani rupee and send positive signals to other creditors, allowing Pakistan to access more loans without further policy changes.
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