The multilateral credit institution had delayed the release of the seventh and eighth tranches of $1.7 billion — part of the larger $6 billion bailout — early this year amid concerns over Islamabad’s compliance with the terms of the deal.
However, it signed a “personnel-level” agreement with Islamabad on July 13 to release much-needed funds. However, the deal has yet to be approved by the IMF’s board of directors.
The Pakistani rupee has fallen nearly 30 percent against the dollar since the impeachment of the Imran Khan-led government in April, preceded and followed by political unrest. Uncertainty over IMF aid is seen as one of the main reasons for the currency’s free fall from around Rs 180 to a dollar in April to Rs 246 last week.
The IMF is now in the midst of a summer recess. “The recess ends on August 12. Technically, the board meeting could take place before August 20, if the recommendations are sent before August 6,” said a diplomatic source.
Another source said the IMF had asked Pakistan for guarantees from Saudi Arabia and the UAE that they would lend it $4 billion once the IMF releases its tranche.
“The Pakistanis have been assured and transferred from the two friendly countries. So we see no problem in the council’s approval,” said a senior diplomatic source.
Pakistan, the sources said, sought approval from the IMF board of directors before the August 1-12 recess and sent several officials to Washington.
Earlier this week, army chief Qamar Bajwa the US Deputy Secretary of State called on Wendy Sherman and sought Washington support for the package. “But Pakistanis were informed that it is not possible to hold a board meeting before the recess (end) as some members were already on leave,” said one of the sources.