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The IMF denies asking Pakistan to raise $8 billion to unlock bailout deal

May 15, 2023

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The International Monetary Fund (IMF) on Sunday denied reports that it is asking Pakistan to raise $8 billion in fresh financing to unlock a bailout deal.

“There is no truth to reports that the IMF is asking Pakistan to raise $8 billion in fresh financing,” IMF Resident Representative for Pakistan Esther Perez Ruiz said in a statement.

“The amount of financing necessary to ensure Pakistan stays current on external payments has remained unchanged throughout discussions under the ninth review,” she added.

The IMF will continue to support Pakistan in the best possible way to secure sufficient financing from partners, Ruiz said.

The bailout program, which started in 2019, is due to end in June. Pakistan has already implemented the majority of the conditions set by the IMF, including taxes, tariffs, and a market-based exchange rate.

However, the deal has remained stalled at the ninth review since November last year. As June approaches, concerns are increasing that the deal will not be finalized, which could leave investors and market participants uninterested in the Pakistani market.

The IMF’s denial comes as Pakistan’s economy is facing a number of challenges, including high inflation, a widening current account deficit, and a depreciating rupee. The government has taken a number of steps to address these challenges, but it is unclear whether they will be enough to convince the IMF to approve the bailout.

The IMF’s decision on the bailout will have a significant impact on Pakistan’s economy. If the deal is finalized, it will provide Pakistan with much-needed financial assistance and help to stabilize the economy. However, if the deal is not finalized, it could lead to a further decline in the economy and could have a negative impact on Pakistan’s ability to repay its debts.