Talks between Pakistan and the International Monetary Fund (IMF) will now resume after the approval of the economic crisis-hit country’s forthcoming national budget when the two parties will strike a deal for a loan facility, reports Geo News.
Sources within the Finance Ministry said that the talks are expected to resume on Tuesday, and Finance Minister Miftah Ismail and State Bank of Pakistan governor will sign the contract on Pakistan's behalf.
This comes after the UN body confirmed major progress in Pakistan-IMF parleys last week.
Pakistan's economy teeters on the brink of a financial crisis, with foreign exchange reserves drying up fast and the Pakistani rupee at record lows against the US dollar amid an IMF bailout programme.
The sources further stated that Pakistan has requested the IMF to enhance the programme to $8 billion instead of $6 billion and asked for an extension of a year to prolong the programme till 2024.
The policy framework will be handed over to Pakistan in the next two days, sources added.
On Wednesday, as Reuters reported, both sides said key progress was made in talks on the revival of the bailout programme, with Islamabad expecting the lender to increase the size and duration of the 39-month, $6bn facility.
Pakistan unveiled a $47 billion budget for the fiscal year 2022-23 this month aimed at tight fiscal consolidation in a bid to convince the IMF to restart much-needed bailout payments.
However, the lender later said additional measures were needed to bring Pakistan's budget in line with the key objectives of the IMF programme.
The two sides held talks on Tuesday night and agreed on the budget and fiscal measures but still need to agree on a set of monetary targets, the finance minister said.
Pakistan entered the IMF programme in 2019, but only half the funds have been disbursed to date as Islamabad has struggled to keep targets on track.
The last disbursement was in February and the next tranche was to follow a review in March, but the government of ousted prime minister Imran Khan introduced costly fuel price caps which threw fiscal targets and the programme off track.
Pakistan's new government has removed the price caps, with fuel prices going up the pump by up to 70% in a matter of three weeks.
Earlier last week, Islamabad ordered a range of businesses, from shopping malls to factories, to cut their operating hours to help curb energy demand, as the nation grapples with fuel shortages and blackouts, according to The Express Tribune.
The city’s administration also ordered hotels, cinemas and wedding venues, among others, to close at set times between 9pm and 11:30pm for the next two months.