IMF will not deviate from its rules
Pakistan is in great need of this financial help from Saudi Arabia. But his talks with Saudi are stuck. Also, the game that China played with Sri Lanka is now happening with Pakistan. He is not getting lost in the tussle over debt restructuring. “Timely financial reassurance from external partners will ensure success in the authorities’ efforts and the successful completion of the review with Pakistan,” Kojack said at a media conference. He said that the staff level agreement will be done only after the rest of the points are completed. According to IMF officials, financial assurance is a standard of the IMF program and it is very important to follow it.
Kozak said that the IMF has to co-ensure that whatever financial confidence it has received, it remains in place. Only after this any step can be taken for Pakistan. On the status of negotiations with Pakistan, discussions are underway between IMF staff and Pakistani officials on a staff-level agreement following the completion of the ninth review of the Extended Fund Facility (EFF), according to Kozak.
Necessary measures should be implemented
Kojack said that the authorities are determined to implement the necessary measures. Authorities have started implementing decisive decisions to stabilize the economy and restore confidence. While social assistance is being extended to flood-related needs through the Benazir Income Support Program. Kozak also said that Pakistan’s economy is facing several challenges including slow growth, high inflation and huge financial needs. Certainly a major reason for this is the devastating floods.
This statement from the IMF has come at a time when Pakistan is facing the worst economic crisis in history. Pakistan has been downgraded by default risk and international rating agencies. Along with this, the country is also engaged in efforts to get out of the devastation after the floods in September 2022. The ongoing political crisis in the country is also pushing the country towards a big trouble.
Pakistan engaged in talks with IMF
Pakistan is currently negotiating with the IMF for the revival of the EFF. The talks have been stalled for the last two years. Revival of the bailout package is seen as crucial to stabilize the economy. Pakistan’s economy has been hit by a severe dollar shortage in recent months. The country’s foreign exchange reserves are currently at a historically low level.