IMF, Pakistan To Resume Talks On Unlocking Bailout Funds

TALKS between the International Monetary Fund and Pakistan will resume virtually on Monday, a Pakistani official said, as the two sides look to reach a deal to unlock funding critical to keep the cash-strapped south Asian country afloat.

The two could not reach a deal last week and a visiting IMF delegation departed Islamabad after 10 days of talks, but said negotiations would continue. Pakistan is in dire need of funds as it battles a wrenching economic crisis.

"Duration (of the talks) cannot be confirmed but we intend to wrap these up at the soonest," Finance Secretary Hamed Yaqoob Sheikh told Reuters in a text message, confirming that talks were resuming on Monday.

Talks centre around reaching an agreement on a reforms agenda under the country's $6.5 bailout programme, which it entered in 2019. An agreement on the ninth review of the programme would release over $1.1 billion.
Pakistan's foreign exchange reserves held by the central bank have fallen to $2.9 billion, barely enough to cover three weeks of imports. A resumption of the IMF programme would also unlock other avenues of funding for Pakistan.

An agreement, if reached, would still need to be cleared by the IMF board.

Earlier, Finance Minister Ishaq Dar told reporters Pakistan had agreed with the IMF on the conditions to release the funds, which have been delayed since last December.

Talks would resume virtually on Monday, he added, citing "routine procedures" for the delay. "We will implement whatever has been agreed upon between our teams," Dar said.

In a statement, Pakistan IMF Mission Chief Nathan Porter confirmed talks were continuing and that considerable progress had already been made. The hold-up though sent the price of the country's government bonds tumbling again.

Pakistan is in dire need of a successful outcome. The $350-billion economy is still reeling from devastating floods last year, and the government estimates rebuilding efforts will cost $16 billion.

The heavily-indebted nation only has enough foreign reserves to cover less than three weeks of crucial imports. The longer it takes for the IMF tranche to be paid out, the higher the risk of default, analysts say, especially with elections also looming.

(Source-Reuters)