The Extended Fund Facility (EFF) between Pakistan and the International Monetary Fund (IMF) is expected to be announced this week, according to Federal Minister of Commerce Syed Naveed Qamar on Wednesday.
“Pakistan has taken all the measures needed to unfreeze a $6.5 billion credit line and expects to clinch the deal ‘any day now’,” the minister said in an interview with Bloomberg.
$1.2 Billion Tranche Under Extended Fund Facility (EFF)
Pakistan will receive a $1.2 billion tranche under the EFF, following official announcement by the fund.
The minister claimed that the IMF deal would offer creditors and investors peace of mind that “Pakistan’s economy is now stabilizing and it has taken all the right steps, so in that sense their money will remain protected”.
“The IMF program is the beginning, not the culmination of all other monies flowing in,” he remarked.
The minister insisted that if the country increased its foreign currency reserves, imports would increase, which would help exports as well.
Thousands of containers of supplies became blocked at ports as a result of Pakistan’s limited ability to finance imports, particularly the import of intermediary items, due to limited reserves.
According to Bloomberg, the Pakistani government has increased taxes, reduced subsidies, and devalued its currency to comply with IMF requirements.
The Finance (Supplementary) Bill 2023, intended to reform specific laws relating to taxes and levies, was enacted by the National Assembly on Monday.
To reduce the fiscal deficit, the measure proposes to impose new taxes worth Rs. 170 billion.
The mini-budget was adopted by the lower house of parliament with a majority vote in an almost opposition-free chamber where genuine opposition voices were absent.
To read our blog on “Rs. 170 bn mini budget passed by NA in IMF context,” click here.