As cash runs out, Pakistan introduces bill to unlock IMF funds

Islamabad, Pakistan – The Pakistani government has tabled a 170 billion rupee ($643m) finance bill to help the cash-strapped country secure funds from the International Monetary Fund (IMF) to stave off default.

Presented before Parliament on Wednesday evening by Finance Minister Ishaq Dar, the measures include raising the general sales tax by a percentage point to 18 percent and follow hikes in the price of fuel and gas earlier this week as part of efforts to meet the global lender’s conditions for the release of a $1.1bn loan tranche, originally due in November 2022.

The bill will be put up for debate in Pakistan’s Senate, the upper house of Parliament, on Friday. Dar said he expected it to be approved by early next week.

It comes after an IMF delegation visited Pakistan late last month to discuss the ninth review of a $6.5bn bailout programme that Pakistan entered in 2019.

While the government failed to sign a staff-level agreement with the IMF team after 10 days of negotiations, it is expected that the bill’s approval will result in the IMF unlocking the $1.1bn installment, as well as Pakistan’s allies providing it with much-needed external financing.

Pakistan was able to secure the previous tranche of $1.17bn in August last year after the IMF approved the seventh and eighth review of the package, with the central bank possessing at the time more than $8bn in foreign reserves.



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