ISLAMABAD :. Pakistan and International Monetary Fund (IMF) have reached an agreement for revival if suspended Extended Fund Facility (EFF) paving way for release of much desired tranche of $ 1 billion . The fund has increased the fund volume to $ 7 billion .
Although IMF has not made any formal announcement for resumption of EFF for Pakistan , the government officials of the Finance ministry has confirmed reaching a staff level agreement for resumption of lain facility for Pakistan
IMF had signed an agreement with Pakistan in 2019 for disbursement of $ 6 billion and released half of the agreed loan in February this year, but the Pakistan Tehreek e Insaf (PTI) government of decision to cap the prices of petroleum products resulted in suspension of the programme.
With coming in of a new government in Pakistan, IMF put new conditions like upward revision in tax revenue collection target, uncapping the prices of petroleum prices and putting in place an effective accountability system to check corruption in public sector departments .
The coalition government did show unflinching commitment to meet all conditions of the fund including de-capping of the prices of petroleum products as Pakistan badly needed revival of EFF programme, but de-capping of petroleum products proved very tough one. It finally moved to meet IMF this condition too but it had double difficulty to face for it. On one side upward revision in oil prices stoked inflation putting the people lives miserable due to killing price hike and on the other the ousted prime minister Imran Khan, kept on adding pressure on the government by holding public gatherings and rallies by accusing it of responsible of higher oil prices and linked price hike.
Despite rising pressure from both the public and the political opponents , the government negotiating team led by Finance minister , Miftah Ismail, kept on obsotbing the pressure and at the same time continued negotiating with IMF and finally it managed to reach a staff level agreement for resumption of EFF programme .
The staff level agreement with IMF is of great significance for Pakistan . It would help get much needed funds of $ 7 billion to over come the on-going financial crisis and build up its Forex reserves and at the same time it will stop devaluation of the rupee.
A formal announcement by IMF is likely to be made in next 24 hours.