Finance Minister Senator Muhammad Aurangzeb on Tuesday expressed confidence that the IMF board will approve the $7 billion, 37-month Extended Fund Facility (EFF) for Pakistan during its meeting set for Wednesday.
Speaking virtually at the “High Level Private Sector Dialogue – CPEC-II and the Region” hosted by the Pakistan Regional Economic Forum, Aurangzeb highlighted that Pakistan successfully wrapped up a nine-month Standby Agreement (SBA) with the IMF, and expressed optimism about the upcoming decision.
“We’re hopeful that the IMF board will give the go-ahead for the new 37-month, $7 billion program in the meeting scheduled for tomorrow,” he stated.
The minister emphasized Pakistan’s commitment to structural reforms under the program, stressing the importance of staying on track with reforms in areas such as taxation, the energy sector, state-owned enterprises, and privatization. “We will stay the course,” he added.
Aurangzeb thanked China for its continued support as Pakistan’s key partner throughout the fund program. He noted that the country’s economic trajectory has shown improvement, with positive indicators carrying over from the previous fiscal year into the current one.
He highlighted that the currency and foreign exchange reserves have stabilized, with enough reserves to cover two months of imports. Additionally, inflation has slowed, the policy rate has dropped, and Kibor rates have declined, benefiting industries.
Aurangzeb also mentioned that the government recently rejected Treasury Bills (T-bills) and Pakistan Investment Bonds (PIBs) in a move to send a clear message that they are no longer in urgent need of domestic borrowing. He indicated that if domestic borrowing is required, it will be on the government’s terms, encouraging the banking sector to support private businesses instead.
While welcoming investment inflows, particularly in the form of debt and equity that would boost foreign direct investment (FDI), Aurangzeb underscored the necessity of macroeconomic stability and stressed that the foundation has been laid for promoting economic stability in Pakistan.
