KARACHI: The financial sector saw Finance Minister Ishaq Dar’s meeting with US ambassador Donald Blome in Islamabad on Wednesday as a positive development while the currency markets indicated their satisfaction with a calm day for the exchange regime.

The meeting has revived hopes for a breakthrough in negotiations with the International Monetary Fund for the release of $1.2 billion tranche.

A statement issued by the Finance Division said Mr Blome expressed confidence in the policies and programmes of the government for economic sustainability and socioeconomic uplift of the masses.

Mr Dar told the US envoy that the budgetary measures for 2023-24 were aimed at reducing the fiscal gap in order to meet national and international obligations.

He informed the US diplomat about the progress on ongoing talks with the IMF and stated that the government is committed to completing the programme.

However, a statement by the finance division did not mention any US support for IMF deal, but the financial sector considered the meeting a move by the government to get help for concluding the IMF deal before June 30.

The government has been under serious criticism by the IMF over data for the budget FY24. The government is willing to catch the outgoing $2.2 billion of IMF loan before it expires on June 30.

Despite all possible efforts Pakistan has not been able to persuading the IMF into releasing the instalments and create space for next loan facility required for the coming years.

The finance ministry said it was committed to completing the IMF programme, stalled since November last year, and was keenly engaged with the lender “to reach an amicable solution”.

According to the finance ministry, the US ambassador extended his support to further promote bilateral economic, investment and trade relations between the two countries.

“The two sides also exchanged views about areas of common interest and how the existing bilateral relations can be enhanced further,” said the statement.

Pakistan has been asking friendly countries to use their influence for release of the IMF tranche and complete the extended facility of $6.7bn. Experts and independent economists, including former finance minister Miftah. Ismail, have been emphasising calling for a deal with IMF They believe Pakistan can’t survive and avoid default without IMF.

However, the meeting with the US Ambassador was considered a positive step towards a deal on the IMF programme. The US has greater influence and larger shares in the IMF than any other country.

Even tacit support from Washington could help Pakistan get loans stuck up from donor agencies.

The local currency markets, both open and inter-bank, expressed satisfaction without going for any major change in the rupee’s value. The open market was unchanged at 292 while the inter-bank raised the rupee by 24 paise against the US dollar.

“Hopes are still alive. The meeting with the US diplomat could produce positive results for Pakistan. The fear of default cost heavily not only to the PKR but the entire economy,” said Atif Ahmed, a currency expert and dealer in the inter-bank market.

Published in Dawn, June 22nd, 2023

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Accessing the RSF

Accessing the RSF

RSF can help catalyse private sector inves­tment encouraging investment flows, build upon institutional partnerships with MDBs, other financial institutions.

Editorial

Madressah oversight
Updated 19 Dec, 2024

Madressah oversight

Bill should be reconsidered and Directorate General of Religious Education, formed to oversee seminaries, should not be rolled back.
Kurram’s misery
19 Dec, 2024

Kurram’s misery

THE unfolding humanitarian crisis in Kurram district, particularly in Parachinar city, has reached alarming...
Hiking gas rates
19 Dec, 2024

Hiking gas rates

IMPLEMENTATION of a new Ogra recommendation to increase the gas prices by an average 8.7pc or Rs142.45 per mmBtu in...
Geopolitical games
Updated 18 Dec, 2024

Geopolitical games

While Assad may be gone — and not many are mourning the end of his brutal rule — Syria’s future does not look promising.
Polio’s toll
18 Dec, 2024

Polio’s toll

MONDAY’s attacks on polio workers in Karak and Bannu that martyred Constable Irfanullah and wounded two ...
Development expenditure
18 Dec, 2024

Development expenditure

PAKISTAN’S infrastructure development woes are wide and deep. The country must annually spend at least 10pc of its...