© Reuters. FILE PHOTO: The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
(Reuters) – The International Monetary Fund’s (IMF) review mission met with Pakistani authorities in Islamabad on Thursday and commended the government on its progress toward economic recovery, the country’s finance ministry said in a statement.
The South Asian nation is operating under a caretaker government after an IMF loan programme, approved in July, helped avert a sovereign debt default.
Under the $3 billion standby arrangement (SBA), Pakistan received $1.2 billion from the IMF as the first tranche in July.
“Nathan Porter, IMF Mission Chief, appreciated the government’s commitment to meeting the first-quarter targets, and commended the government’s efforts and measures taken in some critical areas,” the ministry said.
The IMF has not made a statement on the meeting and could not be immediately reached for comment.
The ministry’s statement added that caretaker Finance Minister Shamshad Akhtar briefed the IMF mission on fiscal measures and discussed reforms and measures undertaken by Pakistan’s taxation body, as well as the government’s strategies to address its circular debt issue.
Circular debt is a form of public debt that builds up in the power sector due to subsidies and unpaid bills.
On Monday, Pakistan’s central bank held its key rate at 22%. In its statement it said that a “successful and timely completion of the upcoming IMF-SBA review would help unlock other multilateral and bilateral financing.”
On Oct. 13, Jameel Ahmad, governor of the State Bank of Pakistan (SBP) released a statement saying that Pakistan’s central bank had met an end-September deadline for a forward book target of $4.2 billion agreed with the IMF.
He added that the SBP is also comfortably placed to meet the other end-September IMF targets, including Net International Reserves (NIR) and Net Domestic Assets (NDA).