IMF may allow bi-annual reviews under next programme

ISLAMABAD: Pakistan and the IMF staff have proposed reviews under $6 billion bailout package on a biannual basis but the final decision will be taken by the Fund’s Executive Board at the time of approval of the next programme.“Under the next programme, the IMF’s Executive Board will consider reviews of Pakistan’s economy on biannual basis instead of quarterly basis in order to give more time for adjustments on key targets,” official sources confirmed toThe News on Monday. When the IMF officials were quizzed on this subject, they said it would be decided by the Fund’s Board of Directors at the time of programme approval. “But quarterly reviews are more appropriate for Pakistan and this preferred option might continue under the next programme arrangement,” they added.An official who participated in the recently held parleys with the IMF team told The News on Monday that the IMF team has floated this idea to allow the authorities to move ahead with adjustment period from three months to six months. For instance, the government will have to reduce its reliance on borrowing from the central bank and it will be bound to retire the existing piled-up due liabilities. If the review will be done after six months it will help Pak authorities to make adjustments within the increased timeframe.The official said the Pakistani authorities had not yet signed the Letter of Intent (LoI) and Adviser to the PM on Finance Dr Abdul Hafeez Shaikh and Governor SBP Reza Baqir will sign this document after the upcoming budget. It is expected that the IMF’s Board would consider Pakistan’s request of $6 billion package probably by July 2019. “After fulfilling all prior actions, including announcement of the next budget for 2019-20, the LoI will be signed and dispatched to the IMF’s Executive Board for consideration of approval of next bailout package,” the official concluded.

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