IMF talks likely to clear way for 1.2 billion dollar tranche

Ongoing talks between Pakistan and the International Monetary Fund (IMF) are likely to end this week, which might lead to a staff-level agreement and the release of about $1.2 billion, according to officials from the Finance Ministry.

The discussions have centered around Pakistan’s economic performance and how well the country is meeting important goals set by the IMF program.

Officials said the IMF is happy with Pakistan’s foreign exchange reserves and liked the performance of the Federal Board of Revenue in reaching its revenue targets during the July-September period.

Meeting the tax collection target was called a major achievement for the first quarter of the current financial year, according to the sources.

Both sides also talked about a plan to start a fixed tax system for farmers by the end of the current financial year.

The State Bank of Pakistan shared details with the IMF team about steps taken to keep foreign exchange reserves stable and reduce inflation.

The central bank told the delegation that foreign exchange reserves are at $21.4 billion, and commercial banks hold an additional $5.4 billion, the sources added.

The IMF delegation is set to give Pakistan’s economic team a draft of the Memorandum of Economic and Financial Policies (MEFP).

Reaching an agreement on the MEFP would help move forward with a staff-level agreement, which could lead to the release of a $1.2 billion funding amount, the sources said.