ISLAMABAD – The executive board of the IMF (International Monetary Fund) will meet today (August 29) to consider the loan renewal plan for Pakistan.
The top representatives of cash-strapped Pakistan will meet with the International Monetary Fund (IMF) on Monday to discuss a bailout package as the nation continues to experience many economic difficulties. An IMF source told Pakistan's media that "the board is likely to approve the disbursement of the 8th and 9th tranche (about USD 1.2 billion) on Monday." Negative signals will be sent if you don't, especially during the floods.
Pakistan would receive USD 1.2 billion following the completion of the IMF agreement. According to a Pakistani daily, the international lender may give up to USD 4 billion during the remaining months of the current fiscal year, which started on July 1. Pakistan may also ask the IMF's Rapid Financing Instrument (RFI), which could provide additional funding of up to USD 500 million, for emergency assistance, as per reports.
To address the economic effects of the Covid-19 epidemic, Pakistan will get USD 1.386 billion in April 2020 from the IMF board. But the money hasn't yet arrived. The Wall Street Journal (WSJ), among other US media outlets, corroborated the information regarding the IMF conference.
Pakistan has secured at least USD 37 billion in foreign loans and investments, the Wall Street Journal reports, keeping the nation from experiencing the same financial disaster as Sri Lanka. According to media sources, Pakistan has been able to negotiate "loans, funding, postponed oil payments, and investment commitments from China, Saudi Arabia, Qatar, and the UAE totaling close to USD 12 billion. This will assist the cash-strapped nation in temporarily avoiding a default.
However, according to American Broadcaster Voice of America, such guarantees won't be made accessible until the IMF board accepts the plan (VOA). According to experts, Pakistan's economy is broad and deep, and its geostrategic position is strong enough for it to prevent default.
Despite some disputes, Tamanna Salikuddin, head of South Asia programmes at the United States Institute of Peace, said that Washington "still supports the loans through the IMF because a crisis on Afghanistan's border is not something that the US wants to see." Salikuddin listed the three main reasons for the US's ongoing interest in Pakistan as "counterterrorism, nuclear security, and stability." She said, "This geostrategic significance (sometimes) drives Pakistan to adopt imprudent economic policies as the leadership may feel the nation is too large to fail."