Assure financing BOP deficit : IMF to Pakistan

Colombo (News 1st) - As the Pakistani Rupee continues to depreciate against the dollar, the International Monetary Fund (IMF) has requested Pakistan to give an assurance that its balance of payments would be fully financed for the remaining period of the programme which was stalled late last year.

The Pakistan government has been trying to fulfill all demands to unlock a USD 1.1 billion bailout package. However, the lender expects the Pakistan government to complete external financing as one of the last in a string of prior actions before clearing funds stalled since late last year. 

The Pakistani rupee dropped by 6 percent against the US dollar while the government raised the interest rate by 20%. The country's international bonds have fallen by more than three cents in the dollar while the country's central bank foreign exchange reserves have fallen to levels barely enought to cover three weeks of imports. 

Pakistan entered a USD 6 billion programme in 2019 which was later expanded to USD 6.5 billion in 2022. Even though IMF funding is critical to revive the cash-strapped country, the delays in negotiations have created uncertainty in the currency market. 

However the Pakistan finance minister Ishaq Dar claims that the assurance for external financing was not one of IMF conditions to clear funding.