The IMF has reached a staff-level agreement with Pakistan for $1.17bn in disbursements subject to board approval. In a statement, the IMF indicated that for higher financing needs, its board will consider an extension of the Extended Fund Facility (EFF) till June 2023 by $1bn taking total access under the program to $7bn. The agreement includes the implementation of the fiscal 2023 budget, which aims to reduce the government’s borrowings and boost revenues, minimize subsidies and ensure the protection of development spending. Pakistan is also required to implement power sector reforms, proactive monetary policy to control inflation and work on reduction in poverty. The IMF team head Nathan Porter said in a statement, “Pakistan is at a challenging economic juncture… economic overheating led to large fiscal and external deficits in FY22, contributed to rising inflation, and eroded reserve buffers.”
Pakistan’s dollar bonds were trading lower with its 7.95% 2029s down over 2.61 points to 78.69 yielding 12.87%.
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