IMF delays approval of $7bn loan package for Pakistan

The much-anticipated $ 7 billion bailout programme of the International Monetary Fund (IMF) for Pakistan is expected to be delayed further, sources said on Wednesday. 

Sources said no meeting between the IMF Executive Board and Islamabad is scheduled until August 30.

There were a couple of reasons behind the delay, including the unavailability of external financing, non-materialisation of the launching of international bonds, and increased subsidies for rationalising power tariffs. 

Earlier a month, Finance Minister Mohammad Aurangzeb said the Fund’s Executive Board would approve the loan package in August. However, sources said political instability and lack of full clarity about external financing leading unwarranted delays in approval. 

“Things are quite crucial at this stage as Islamabad will have to manage external financing as early as possible for getting approval from the Fund’s executive board,” the News quoted an official in government.

According to sources, Pakistan’s name has not been included in the latest schedule of the IMF Executive Board until August 30. 

The Executive Board will review the applications of three countries, including Vietnam, Guinea, and Vanuatu.

The cash-strapped country was seeking a rollover of a $12 billion deposit and refinancing of a commercial loan as part of its effort to meet the IMF’s conditions.

Currently, the country holds $5 billion in external financing from Saudi Arabia, $4 billion from China and $3 billion from the United Arab Emirates.