General Bajwa, has requested assistance from Washington in achieving an early transfer of funds from the IMFin order to help stabilize Pakistan's shrinking economy.

 

The Chief of Army Staff, General Qamar Javed Bajwa, has requested assistance from Washington in achieving an early transfer of funds from the International Monetary Fund in order to help stabilize Pakistan's shrinking economy.

Deputy Secretary of State Wendy Sherman, according to security sources, spoke with the army chief earlier this week.

It is stated that the army chief made a plea to the White House and Treasury Department to get the IMF to immediately supply the almost $1.2 billion that the country is slated to receive under a reopened loan program.

"Staff-level approval" for the loan was granted by the International Monetary Fund (IMF) on July 13. IMF Executive Board clearance is required before the transaction can be completed as part of Pakistan's $6 billion Extended Fund Facility.

The International Monetary Fund (IMF) will be on vacation for the next three weeks, and its board will not meet until late August at the earliest. According to an IMF official who spoke on the condition of anonymity, the loan clearance for Pakistan has not yet been announced.

Due to the rupee's depreciation, time is of the essence for Islamabad. With less than $9 billion in foreign reserves, the country can only fund two months' worth of imports.

According to a senior IMF official, there is a big difference between staff-level and board-level approval.

Our stakeholders, countries that take a vote as to whether or not they are in Favour of this, make the final decision, "stated an official. What a distinction. As a result, the only legally binding step is a board approval, not a staff-level agreement. "

As the largest shareholder, the United States has a significant stake in the fund, which was established in 1945.

There were separate discussions between Pakistani and American officials in July, but none of them were able to reach an agreement on the disbursement of funds in a timely manner.

"Several senior Pakistani officials have met with US and other key stakeholder nations in the IMF and World Bank in the last week to register concerns about the timing of IMF Executive Board decisions, pressing to expedite review of Pakistan's progress on prior actions," said an official familiar with the proceedings.

When other representatives were unable to deliver, the army chief was able to grab Washington's attention, according to reports.

In the nearly 60 years since Pakistan joined the IMF in 1958, it has only completed one of its 22 program.

It was stated that currency and foreign reserves were in a precarious position, but work had been done on the IMF's financing capacity.

This month will be difficult, but there is potential to stabilize the economy if the government can get through it, insiders say.

In a media interview, the Acting Governor of the State Bank of Pakistan, Murtaza Syes, indicated in a media interview that Pakistan's default fears are exaggerated. He stated that in the next 12 months, the funding requirements will be met.

To be sure, he's acknowledged that Pakistan would prefer to receive IMF funding sooner rather than later, but the army commander has also revealed that Islamabad is in talks with Saudi Arabia and China to secure additional funding.

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