Pakistan’s Prime Minister hopeful for deal with IMF this month

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Karachi (Reuters) – Pakistani Prime Minister Shehbaz Sharif is hopeful of finalising a deal with the International Monetary Fund (IMF) this month, he said in an interview with Turkish news agency Anadolu.

The release of pending bailout funds under the 9th IMF review are crucial for Pakistan to resolve an acute balance of payments crisis. Reserves at the country’s central bank can just cover a month’s worth of imports.

A staff-level agreement to release $1.1 billion, out of a $6.5 billion package, has been delayed since November, with more than 100 days gone since the last staff-level mission to Pakistan, the longest such delay since at least 2008.

“We are still very hopeful that the IMF programme will materialize. Our 9th review by the IMF will match all terms and conditions and, hopefully, we’ll have some good news this month,” said Sharif, adding that Pakistan had competed all prior actions needed to unlock funding.

Pakistan is set to announce its Federal Budget on May 9.

Last month, the finance minister said that the IMF had asked for details about the budget, which the government had planned to share.

The country is reeling from an economic crisis with inflation surging to 37.97% in May, posting a record for the second consecutive month and also the highest in South Asia.

The government has removed caps on the exchange rate, imposed taxes, raised energy tariffs and scaled back subsidies in an attempt to unlock the IMF funding. It has also raised key interest rates to a record 21%.

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