IMF officially includes Pakistan’s EFF on agenda for Sept 25 meeting

ISLAMABAD: The International Monetary Fund (IMF) has officially included Pakistan’s new 37-month Extended Fund Facility (EFF) on the agenda for its Executive Board meetings on September 25. Prime Minister Shehbaz Sharif expressed gratitude to allied countries for their unwavering support in helping Pakistan secure the bailout package.

In a statement, the IMF confirmed that its board would review the $7 billion EFF agreement with Pakistan during the meeting. “Pakistan is implementing the terms of the 37-month agreement,” the statement added.

The agreement for the loan program was reached in July, but it is subject to the IMF board’s approval, along with “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.” This week, Pakistan must secure $2 billion in external financing from bilateral and commercial lenders.

According to sources, Pakistan currently holds $5 billion in cash deposits from Saudi Arabia, $4 billion from China, and $3 billion from the UAE. Additionally, there are $4.5 billion in commercial loans, some of which are from China, according to ministry officials.

Before the IMF’s announcement, Prime Minister Shehbaz called the progress on the bailout “good” and acknowledged the assistance of friendly nations in this process. He emphasized the need for Pakistan to become self-reliant and move away from dependence on debt, hoping this would be the country’s last IMF package.

While praising the continued support from friendly nations, PM Shehbaz refrained from revealing details but acknowledged their crucial role in aiding Pakistan. He also expressed concern that repeated loan requests could diminish the stature of Pakistan as a nuclear nation.

The prime minister assured the government was making progress in securing the IMF package and applauded the State Bank of Pakistan’s decision to reduce the policy rate by 2%, seeing it as a move to encourage investor confidence. He expressed hope that both the policy rate and inflation would drop to single-digit figures.

For years, Pakistan has heavily relied on IMF programs, sometimes teetering on the verge of default, and often relying on financial aid from countries like the UAE and Saudi Arabia to meet the external financing requirements set by the IMF.