Prime Minister Shehbaz Sharif said on Tuesday that the International Monetary Fund (IMF) will club the seventh and eighth reviews of Pakistan’s Extended Fund Facility (EFF), and disburse roughly $1.9 billion in the coming days.
The seventh tranche is worth $900 million and the eighth is worth $1 billion, raising the prospect of $1.9 billion being disbursed once the IMF board gives the all-clear to resume the bailout programme.
Speaking at the ‘Turn Around Pakistan Conference’ in Islamabad, the PM said the grants from China and IMF will help Pakistan attract investment and increase its export earnings.
The statement comes as Pakistan said it has received combined economic and financial targets for the seventh and eighth reviews of its IMF bailout programme.
The combined reviews mean disbursement of roughly twice the amount being expected by Pakistan earlier, which was around $900 million. However, to achieve this, Islamabad will have to meet combined targets set forth by the Memorandum of Economic and Financial Policies (MEFP).
Pakistan has been making all-out efforts to revive the IMF programme to avert a balance of payment crisis that has been aggravated by soaring energy prices.
Central bank foreign currency reserves have fallen to as low at $8.2 billion, barely enough to cover six weeks of imports, and the economy is reeling from sharp depreciation in the Pakistani rupee and double-digit inflation. However, reserves held by the State Bank of Pakistan are likely to get a boost after the agreement with Chinese banks.
PM Shehbaz also said at the event that the government is working for “self-sufficiency of Pakistan. “Due to the prevailing global energy crisis, the international price of coal has soared over the past few months.
“We were forced to choose between load-shedding or draining foreign exchange reserves to import coal,” he said, adding that the price of coal had receded marginally.
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He lamented that Pakistan lacked a long-term energy agreement and an oil deal made with Qatar was proving to be a lifeline for the country.
“When energy rates fell, the past government failed to enter into long-term energy agreements,” he said. “Now, we are struggling for bids.”
Speaking on the occasion, Finance Minister Miftah Ismail also said Pakistan will receive nearly $2 billion from the IMF instead of $1 billion.