Pakistan says all matters relating to bailout program ‘settled amicably’ with IMF

ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Thursday matters relating to a $7 billion International Monetary Fund (IMF) bailout loan for Pakistan had been ‘settled amicably’ and would be finalized this month when the lender’s executive board met on September 25.
An IMF announcement on Thursday that it would meet at the end of the month to discuss the loan allayed fears of a prolonged delay in the much-needed funds for Pakistan. The agreement for the 37-month program was signed in July and has been pending board approval since.
Pakistani Prime Minister Shehbaz Sharif said earlier on Thursday that “friendly countries” had played a major role in helping meet requirements placed before Islamabad by the IMF, which included arranging additional external financing and debt rollovers. 
Islamabad has for years relied on China, Saudi Arabia and the United Arab Emirates for financial assistance to meet external financing requirements and avoid sovereign default, which it came close to last summer.
“All matters with the IMF have been settled amicably,” Aurangzeb said in a statement. “These matters will be finalized in the meeting of the IMF board this month.”
Pakistan’s last $3 billion IMF program helped avert a sovereign default last year, amid a decline in foreign exchange reserves to critical levels, currency devaluation and record inflation.
On Thursday, Pakistan’s sovereign dollar bonds rallied, with the 2031 maturity trading 1 cent higher to bid at 79.93 cents on the dollar, according to Tradeweb data.
Pakistan has been struggling with boom-and-bust cycles for decades, leading to 22 IMF bailouts since 1958. The latest economic crisis has been the most prolonged, pushing the country to the brink of a sovereign default last summer before it was saved by a last-minute short-term IMF bailout.
The conditions of the fresh bailout have become tougher such as higher taxes on farm incomes and electricity prices. The bailout is aimed at cementing stability and inclusive growth in the crisis-plagued South Asian country.
“We are very happy that we can say now that the Board meeting is scheduled to take place on September 25th,” an IMF spokeswoman said on Thursday. “And this is following Pakistan obtaining necessary financing assurances from its development partners. 
“Consistent policy making has supported economic stability in Pakistan, most notably a resumption of growth, a significant disinflation, and a significant increase in the country’s international reserves.”