With IMF's last review, Pakistan aims at yet another bailout

The agency will hold a second and last review of the nation’s $3 billion standby arrangement, the finance ministry says

The International Monetary Fund (IMF) will hold a second and last review of Pakistan's $3 billion standby arrangement this week in Islamabad, the finance ministry said on Wednesday, with the South Asian nation seeking yet another bailout.

The four-day review begins on Thursday, the ministry said in a statement.

Islamabad secured the last-gasp rescue package last summer, averting a sovereign debt default.

"Pakistan has met all structural benchmarks, qualitative performance criteria and indicative targets for successful completion of the IMF review," the ministry added, hoping for a successful IMF staff level agreement after the appraisal.

The last review, if successful, will release a tranche of around $1.1 billion, the ministry said.

Prime Minister Shehbaz Sharif has already directed his finance team, headed by newly installed Finance Minister Muhammad Aurangzeb, to initiate work on seeking an Extended Fund Facility (EFF) after the standby arrangement expires on April 11.

Aurangzeb told reporters on Tuesday that Pakistan would use the opportunity to make the case for a larger, long-term programme, according to the Dawn daily.

The global lender has said it will formulate a medium-term programme if Islamabad applies for one.

The government has not officially stated the size of the additional funding it is seeking through a successor programme from the fund.

Pakistan will be "very keen to start discussions on another EFF with them during these talks," the finance minister said, adding that further negotiations will take place on the sidelines of the IMF and World Bank's spring meetings in April in Washington.

During the latest review, he said: "We would at least kick-start the process and get this going. Let's see how they respond."

Aurangzeb, who was picked over several other aspirants, including former four-time finance minister Ishaq Dar, has to bring stability to a country plagued by crippling boom-bust cycles that have led to more than 20 IMF bailout programmes in the past.

The debt-ridden economy, which shrank -0.2% last year and is expected to grow around 2% this year, has been under extreme stress with low reserves, a balance of payment crisis, inflation at 23%, policy interest rates at 22% and record local currency depreciation.