Pakistan, IMF close to signing deal for bailout program — Asad Umar

Finance Minister Asad Umar addresses a business community at the Sarhad Chamber of Commerce and Industry in Peshawar on Monday. (SCCI)
Updated 11 February 2019

Pakistan, IMF close to signing deal for bailout program — Asad Umar

  • Finance minister says no agreement was signed with IMF during a meeting in the UAE
  • Pakistan seeks around $6 bn from IMF to support its ailing economy

KARACHI: Pakistan and the International Monetary Fund are close to signing a deal for a bailout program which Islamabad has long been negotiating for to steer the country out of a financial crisis, Finance Minister Asad Umar said on Monday.
“The differences have been narrowed down with the IMF as both sides share common views on the need for structural reforms,” Umar told businessmen while speaking at the Sarhad Chamber of Commerce and Industry (SCCI) in Peshawar on Monday.
However, he insisted that the “upcoming program would be the last agreement” with the global financial body as “we are moving closer” to the deal. 
On Sunday, Prime Minister Imran Khan met with IMF’s Managing Director, Christine Lagarde on the sidelines of the World Government Summit, hosted by the UAE , in Dubai.
Umar dispelled rumors that PM Khan had flown specifically to the UAE to sign the agreement. “No deal was signed with the IMF during the meeting of the prime minister in Dubai with the IMF MD,” he said.
Lagarde, for her part, had reiterated IMF’s support for Pakistan. “I also highlighted that decisive policies and a strong package of economic reforms would enable Pakistan to restore the resilience of its economy and lay the foundations for a stronger and more inclusive growth,” she said.
Following the comments made by the IMF chief, the Ministry of Finance said on Sunday: ‘In this regard, deliberations between Pakistani authorities and the IMF staff will continue to finalize an agreement on the contours of a program.”
After much deliberations, Pakistan had decided to approach the IMF with a formal request for financial help in October last year. Following the request, an IMF delegation — led by Harald Finger — had visited Islamabad a month later in November to initiate discussions for an economic reform program.
While the exact amount agreed upon in the deal has not been disclosed yet, Pakistan is seeking around $5-6 billion from the IMF to support its ailing economy, Umar had said in previous reports.
Meanwhile, Pakistan Peoples Party’s parliamentary leader in the Senate, Senator Sherry Rehman, criticized the government’s lack of transparency and chronic indecisions in its bailout negotiations with the IMF.
“Seven months of dithering and false promises later, we are now hearing that the government is after all, going for a bailout package. This unnecessary back and forth is hurting our already ailing economy. The PTI [Pakistan Tehreek-e-Insaaf] ran its campaign promising that Pakistan will be self-sufficient under their leadership. However, all the economic steps they have taken so far have contradicted the core of their economic vision,” she said.
Calling for transparency, she added that the “parliament still has no idea about the terms on which loans and deferred payments have been made from other countries.”
“The government has not consulted the parliament regarding the terms of their negotiations with the IMF too, despite continuous requests,” she said.
Despite positive signs from the IMF, the country’s stock market remained bearish on Monday as the benchmark KSE 100 index lost 561 points while the currency market dealt with some pressure, too.
“Bearish activity witnessed at PSX on investor fears on likely decisive actions by the government amid the PM’s meeting with the IMF chief hinting at IMF’s conditions on new taxes and increased tariffs weakening growth and corporate earnings outlook,” Ahsan Mehanti, a senior stock analyst, told Arab News.
“...Another blow came from Moody’s which downgraded Pakistani banks,” Samiullah Tariq, Head of Research of Arif Habib Limited told Arab News, adding that the rupee witnessed a further decline “due to the fear of further devaluation”. 
On Monday, Moody’s changed its outlook for the banking system in Pakistan (B3 negative) to negative from stable.
“Over the next 12-18 months, banks in Pakistan will see their credit profiles challenged by their high exposure to the country’s low-rated sovereign debt and a slowing economy,” Constantinos Kypreos, Moody’s Senior Vice President, said.
The negative outlook is based on the international credit rating agency’s assessment of six drivers which include the operating environment (deteriorating), asset risk (deteriorating), capital (stable), profitability and efficiency (stable), funding and liquidity (stable) and, government support (deteriorating).


Makkah governor, Pakistan’s consul general discuss Hajj arrangements

Updated 05 February 2020

Makkah governor, Pakistan’s consul general discuss Hajj arrangements

  • Majid presented a painting of Islamabad’s Faisal Mosque, named after King Faisal, to the Makkah governor
  • Prince Khaled welcomed the consul general and recalled fond memories of his visit to Pakistan many years ago

MAKKAH: Khalid Majid, consul general of Pakistan in Jeddah, recently paid a courtesy call to Makkah Gov. Prince Khaled Al-Faisal.
Majid expressed his gratitude for the facilities extended to the Pakistani mission as well as to the Pakistani community in the Kingdom.
Prince Khaled welcomed the consul general and recalled fond memories of his visit to Pakistan many years ago, and acknowledged the cordial relations between the two countries.
Issues related to the Pakistani community and upcoming Hajj arrangements were also discussed. The consul general extended an invitation to Prince Khaled to visit Pakistan at his earliest convenience, which was accepted.
Majid presented a painting of Islamabad’s Faisal Mosque, named after King Faisal, to the Makkah governor.