Pakistan's $6 billion loan request is denied by the IMF

According to The Express Tribune, after Pakistan's request for USD 6 billion in additional loans was rejected by the International Monetary Fund (IMF), the government was left with little choice but to try to rescue the agreement.

Pakistan's sole option, according to Minister of State for Finance Dr. Aisha Pasha, is to rejoin the IMF, she remarked during a meeting of the National Assembly Standing Committee on Finance. The committee members also discussed the absence of the finance minister, Ishaq Dar, from the meeting.

There isn't any choice but to return to the IMF, and I firmly state that there isn't a Plan B, Aisha stated.

According to The Express Tribune, the committee debated whether to hold Finance Minister Ishaq Dar in contempt of the legislature because of his repeated absences from meetings. Qaiser Sheikh, an MNA for the Pakistan Muslim League-Nawaz (PML-N), presided over the meeting.

As the nation's economy tries to recover, inflation in Pakistan is at its highest level since 1957. The country has surpassed Sri Lanka to take the top spot in Asia for inflation rates.

The shocking 38% inflation rate as of May 2023 presents significant challenges for both the government and the populace of Pakistan.

Dr. Pasha disclosed that Pakistan had urged the IMF to take the current account deficit's revised statistics into consideration while lowering the external funding requirement, but the request was denied. She went on to say that although a staff-level agreement had been reached, $3 billion was still needed, but the IMF insisted on seeing proof of the $6 billion. Dr. Pasha emphasized that there was no other option besides returning to the IMF and that there was no fallback position in the event that talks broke down.

A member of the National Assembly (MNA), Dr. Ramesh Kumar, speculated that Pakistan's foreign policy direction may have contributed to the lengthy delay in starting the IMF project. According to Dr. Pasha, plans call for Pakistan to receive $4.5 billion from Saudi Arabia, the United Arab Emirates, the World Bank, and Geneva Commitments. The final $1.5 billion will be established once a staff-level agreement has been reached, he added.

Of the whole $6.5 billion rescue plan, the IMF has already paid out $3.9 billion, with the remaining amount contingent on the conclusion of three ongoing reviews. As long as talks with the IMF go on, the administration will make an effort to save the deal and get the money it needs.