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Pakistan to discuss Extended Financing Facility with IMF next month | The Express Tribune

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ISLAMABAD:

The issue of an Extended Financing Facility (EFF) with the International Monetary Fund (IMF) will be discussed in Washington next month, Finance Minister Muhammad Aurangzeb said on Friday, as the country seeks to ease a deep economic crisis. magnitude.

The $3 billion relief deal with the global lender expires on April 11, and the two sides reached a staff-level agreement to disburse the final tranche of $1.1 billion earlier this week .

“We have expressed strong interest in an expanded financing facility with the IMF, but the amount is not yet clear,” Aurangzeb told a press briefing, adding that the lender was “very receptive” to the request.

The United States was also “very supportive” of this matter, the minister said.

Prime Minister Shehbaz Sharif, after being sworn in for his second consecutive term, had asked his financial team to start work on seeking an extended financing mechanism from the IMF.

He called a long-term IMF bailout plan “inevitable” on Thursday.

Read also: IMF to release $1.1 billion after staff-level deal

The IMF also said it would support the formulation of a new economic program for the country if requested.

The global lender’s bailout last summer helped avert a sovereign default, but to do so the country had to revise its budget and raise interest rates, taxes and electricity prices and some gas.

As a result, during this period, Pakistan faced inflation of up to 38%, a historic depreciation of its currency and a contraction of the economy.

Obligations

Pakistan will also look to bonds in the international market to help stabilize its economy, Aurangzeb said at Friday’s press briefing, adding that in the meantime, work is underway on panda bonds.

“Once our credit rating improves, we will look to the international bond market,” he said.

The finance minister wants to capitalize on relations with China and has already expressed his intention to tap the Chinese bond market.

In an interview with Bloomberg on Friday, he said Pakistan plans to sell up to $300 million in panda bonds this year.

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