IMF board may meet earlier than expected to approve Pakistan’s tranche: report

• Process to start loan release expected to start this week.
• IMF Executive Board likely to meet before August 20.
• Pakistan is desperately seeking the release of loan from IMF.

The International Monetary Fund’s (IMF) Executive Board meeting to approve the release of the tranche for Pakistan is expected to take place before August 20, Daily Dawn reported.

The board’s approval is a prerequisite for the release of the seventh and eighth tranches of a $6 billion loan programme for Pakistan — that the country had signed with the IMF in 2019.

The disbursement of the latest tranches, which amount to $1.7 billion have been pending since earlier this year after the lender objected to Pakistan’s economic policies.

The IMF and Pakistan had reached a staff-level agreement that revived the $6 billion Extended Fund Facility (EFF) programme for the country in July — but the loan release is subject to the board’s approval.

The publication, citing diplomatic and IMF sources, said that the executive board may meet later this week as the lender’s summer recess ends on August 12.

It was earlier reported that the board’s meeting will take place between August 20-24, but now, the process is likely to start later this week and the session may take place before August 20.

“So, technically the IMF Executive Board’s meeting could take place before August 20, if recommendations are sent to the board by August 6,” a source told Dawn.

The IMF is “keen” on helping out Pakistan and “there has been no delay on their behalf”, but it was “not possible to expedite the process”, a source said, as the country wanted an early approval from the board.

In this regard, Chief of Army Staff General Qamar Javed Bajwa spoke to US Deputy Secr­etary of State Wendy Sher­man, requesting America’s assistance in expediting the process.

“The IMF had asked Pakistan to get assurances from Saudi Arabia and the UAE that they would give an expected $4bn loan to the country after the IMF releases its tranche,” sources told the publication.

“The Pakistanis received, and conveyed, the assurance from the two friendly countries,” a senior diplomatic source told the publication. “So, we see no problem in the board’s approval.”

Pakistan is desperate to get the IMF’s approval as the country’s currency is fast depreciating against the dollar, the foreign reserves are quickly depleting, and political instability is keeping markets from stabilizing.