ISLAMABAD: After in receipt of Washington Office nod, Pakistan and International Monetary Fund (IMF) could reach to staff-level agreement, confirmed Secretary of Finance Hamed Sheikh late Thursday night.

However, “An agreement has already been struck with IMF on prerequisite measures”, confirmed Secretary Finance. He said, “IMF has handed over Memorandum of Economic and Financial Policies (MEFP) document to Pakistan.”

IMF has sought more time for holding Staff Level talks while “International donor has already talked with foreign missions for international financing”, it is said. Insiders of Finance Ministry on condition of anonymity revealed, “Still accord with IMF is in jeopardy as some of vital ‘items’ are on ‘clearance request’ and communique by IMF would be announced after signal from Washington. “But agreed to broad framework aimed at satisfying lender of last resort in coming days,” they added Development comes as negotiations which took place from January 31 to February 9 with IMF which was in Pakistan at government’s request and local authorities concluded here. IMF mission is leaving country today. At same time, Finance Secretary stressed that international creditor assured Pakistani authorities of striking staff-level pact in coming days and “Agreement for releasing loan will also be signed soon”.

Finance Secretary Hamid Yaqoob said that Pakistan and IMF have not signed staff-level agreement so far as some matters are due to be settled which will be finalised in Washington. Actions and prior actions have been agreed, but staff level agreement will be signed subsequently, said Hamed Yaqoob Sheikh.

Finance Minister Ishaq Dar cancelled his media briefing due to collapse of talks. Earlier, IMF discussed draft of Memorandum for Economic and Financial Policies just before end of scheduled review talks, leaving no room for staff level agreement on same day. To break deadlock, an unscheduled virtual meeting was held between Prime Minister Shehbaz Sharif and IMF Mission Chief Nathan Porter.

For clinching MEFP and Staff level agreement, government eventually conceded to almost every demand by IMF. Fund has rejected Gradual approach proposal of Pakistan, saying everything has to be done upfront. Broad consensus is on leaving dollar on market forces, significantly increasing interest rates and electricity prices and imposing new taxes. Due to severity of economic crisis, every agreed measure would be tough on most Pakistanis.

Published in The Daily National Courier, February, 10 2023

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