IMF says it looks forward to working with Pakistan's new govt

A top official of the International Monetary Fund (IMF) has said that they are looking forward to working with Pakistan’s new government on policies to ensure macroeconomic stability.

During a press briefing on Friday, Julie Kozack, Director of the Communications Department at the IMF, was asked whether Pakistan was on track to secure the third tranche of the standby agreement.

She said that the IMF’s Executive Board approved the first review of the Stand-By Arrangement (SBA) with Pakistan on January 11, 2024, which brought the total disbursements under the Stand-By Arrangement to $1.9 billion. The SBA is supporting Pakistan’s efforts to stabilise its economy and, with a strong focus on protecting the most vulnerable.” 

“During the period of the caretaker government, Pakistan has maintained economic stability. This has been achieved by maintaining a tight monetary policy stance to control inflation and continue building up foreign exchange reserves,” the IMF official added.

“We look forward to working with the new government on policies to ensure macroeconomic stability and prosperity for all of Pakistan's citizens.”

However, Ms. Kozack avoids commenting on whether the IMF would entertain any letter by Pakistan’s former prime minister Imran Khan calling for an audit of the election irregularities.

“I’m not going to comment on ongoing political developments,” she said. 

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These remarks come after a day when Imran Khan, the jailed former prime minister, directed his legal team to pen a letter to the IMF, urging the global financial institution to demand an independent audit of the February 8 elections.

Khan’s lawyer, Ali Zafar, told reporters, “In the letter from Imran Khan, we clearly state that if the IMF wants to engage with Pakistan, they should insist on conditions for an independent audit of the polls.”

Zafar mentioned that the IMF, the European Union, and other global organisations have a charter stipulating that good governance is required for operating in the country or providing a loan.

In a related development, Bloomberg reported that Pakistan intends to request a new loan of at least $6 billion from the International Monetary Fund (IMF) to assist the incoming government in repaying billions in debt due this year.

Pakistan narrowly escaped financial default in 2023 with a short-term bailout from the IMF and faces the expiration of this program in March 2024.

The upcoming government will be tasked with securing a long-term deal to ensure the stability of the nation’s $350 billion economy.

The country aims to negotiate an Extended Fund Facility with the IMF, with talks expected to commence in March or April, the Bloomberg report added.