Another round of talks between Pakistan, IMF ends ‘fruitless’

• IMF demands further devaluation of rupee, increase in tax collection as well as interest rate

Another round of talks between Pakistan and the International Monetary Fund (IMF) ended ‘fruitless’ on Tuesday, as both the sides failed to reach consensus for a fresh bailout package, a local media outlet reported.

According to the sources, during the talks held in Islamabad, the officials negotiating from the IMF side demanded further devaluation of rupee against the greenback, an increase in tax collection as well as interest rate.

On these demands, the Pakistani officials stated that an increase in the interest rate would simultaneously increase the expenses on the government side, while achievement of tax collection of Rs4,435 billion would also be difficult, the sources said.

Sources within the finance ministry said the rupee had already been devalued, while demands of the IMF were “not acceptable to us”.

However, Pakistan and the IMF agreed to continue talks in the future, while dates in this regard would be decided later with the mutual consent of both the parties.

Earlier on November 20, 2018, Pakistan had extended talks with the IMF after the two sides failed to agree on the terms of a bailout package.

Finance ministry spokesman Noor Ahmed had said there were still some issues to be ironed out.

“We have covered a lot of areas in terms of convergence of views but there is some more distance to be covered and that’s not much. Another 20pc of distance has to be covered,” Ahmed had told a foreign news agency. “There has been broad agreement on the need for a comprehensive agenda of reforms and policy actions aimed at reducing the fiscal and current account deficits, bolstering international reserves, strengthening social protection, enhancing governance and transparency, and laying the foundations for a sustainable job-creating growth path.”

Pakistan is negotiating its second IMF bailout since 2013 and talks had been expected to conclude early November last year during a visit by an IMF delegation to Islamabad.