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IMF chief Pakistan is seeking potential follow-up loan plan

Monitoring Desk

ISLAMABAD: Pakistan is in discussions with the International Monetary Fund on a potential follow-up programme to its nine-month, $3 billion stand-by arrangement, IMF chief Kristalina Georgieva said on Thursday, adding that it had important issues to solve.
Georgieva told an event at the Atlantic Council think tank, that Pakistan was successfully completing its existing programme with the IMF and its economy was performing somewhat better, with reserves now being built up.
“There is a commitment to continue on this path, and the country is turning to the fund for potentially having a follow-up programme,” Georgieva said, flagging issues that the struggling South Asian nation still needed to address.
“There are very important issues to be solved in Pakistan: the tax base, how the richer part of society contributes to the economy, the way public spending is being directed and of course, creating  a more transparent environment.”
Pakistan and the IMF last month reached a staff-level agreement on the second and last review of the $3 billion stand-by arrangement, which, if cleared by the global lender’s board, will release about $1.1 billion to the struggling South Asian nation. The IMF’s board is expected to review the matter in late April, but no firm date has been set, a spokesperson said.
Both sides have also spoken about negotiating a longer-term bailout and continuing with necessary policy reforms to rein in deficits, build up reserves and manage soaring debt servicing.
Pakistan’s external financing requirements for the next fiscal year would hover above $25 billion, which the country plans to bridge with the help of all the multilateral and some bilateral creditors.
The Express Tribune on Tuesday reported that Finance Minister Muhammad Aurangzeb would meet with Kristalina Georgieva in Washington next week but his interactions with the United States officials might remain at a junior level.
Sources told The Express Tribune, that Aurangzeb was scheduled to meet with United States Assistant Secretary of State for South Asia Donald Lu – a fourth-tier official in the US administration. The minister might also meet with the US Deputy Under Secretary of Treasury – a third-tier official in the US administration.

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