Islamabad May 21 2023: IMF has not linked release of tranche to utilization of funds for political spending says Ministry of Finance in its statement.
“IMF has never asked the Government that funds will not be utilized for political purpose nor any funds can be utilized for any purpose without the approval of the Parliament through the budget” says Ministry of Finance in its statment.
Obtaining commitments of “significant additional financing” is essential before the IMF approves the release of pending bailout funds that are crucial for Pakistan to resolve an acute balance of payments crisis, says IMF on May 11 2023.
A staff-level accord to release a $1.1 billion tranche out of a $6.5 billion IMF package has been delayed since November, with nearly 100 days gone since the last staff level mission to Pakistan. That is the longest such gap since at least 2008.
Julie Kozack, IMF spokeswoman, said that financing already committed by Pakistan’s external partners was welcomed.
The United Arab Emirates, Saudi Arabia and China came to Pakistan’s assistance in March and April with pledges that would cover some of the funding deficit.
“Whether there is IMF or not, Pakistan will not default” says Finance minister of Pakistan.
“Despite this improvement in CAD, dearth of financial inflows led to decline in FX reserves during H1-FY23. In addition to the delays in the disbursements of the IMF tranches and the political uncertainty in the country, higher net FX outflows on account of scheduled debt repayments and disinvestments added to external account pressures. The combined effect of these developments, in the backdrop of US dollar’s appreciation against a basket of global currencies, led to PKR depreciation during H1-FY23” reported by State Bank in its Half year report which was published on Thursday.
