Pakistan in talks with IMF for new $2.5 billion quick standby assistance: Report

Pakistan is currently facing an unprecedented financial crisis and expects a loan from the International Monetary Fund (IMF) to revive the economy. On Wednesday (June 28), Dawn newspaper reported citing people with knowledge of the matter that Islamabad is in talks with the international financial institution for a new $2.5 billion quick standby assistance as the existing programme expires on June 30.

According to the Pakistan-based newspaper, the short-term proposed arrangement, which is for six to nine months, includes an upfront disbursement of $1.1 billion within the next 15 days. It is followed by two or three more reviews for as much as $500 million each.

Pakistan is struggling to finalise an agreement with the lender as its IMF programme runs out. Prime Minister Shehbaz Sharif also held a meeting with the ambassadors of key countries to get support for the revival of the deal. So far, there's nothing concrete.

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Economic crisis in Pakistan

The economy of the nation has been stricken by a balance-of-payments crisis as it attempts to service crippling external debt. Months of political chaos have worsened the situation.

The cost of living crisis is also troubling the common people as inflation has rocketed, the Pakistan rupee has plummeted and the country can no longer afford imports. This has led to a severe decline in industrial output.

Pakistan remained in a difficult phase as it attempted to regain access to a $6.7 billion bailout programme. However, it has been delayed for more than six months. The South Asian nation drafted its annual budget keeping the crisis in mind.

Ishaq Dar told reporters after releasing the budget for the 2023-24 financial year that "we'll see how things go" as he referred to whether to restructure or reprofile debt. Dar added, "In either case, we will talk to bilateral creditors."

To tackle the situation, Pakistan has taken decisive changes to the annual budget, such as hiked taxes and energy prices to win the lender's support. However, these tweaks would impact the common people.

Watch:Civilians in Pakistan may face military trial for vandalising army building

Pakistan to hand over Karachi port to UAE

Pakistan is apparently planning to hand over the Karachi port terminals to the United Arab Emirates (UAE), a move which appears to be the first intergovernmental transaction under a law enacted last year to raise emergency funds.

Earlier this month, a meeting of the Cabinet Committee on Inter-Governmental Commercial Transactions was chaired by the finance minister to discuss the details of the deal.

In the meeting, it was decided to set up a committee to negotiate a commercial agreement between the Karachi Port Trust (KPT) and the UAE government.

(With inputs from agencies)

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