Islamabad (GNP): Formal negotiations between the government and a visiting International Monetary Fund (IMF) staff mission are expected to begin today, Monday, as Pakistan seeks the release of its next tranche of funding. The talks cover the fourth review of the $7 billion Extended Fund Facility (EFF) and the third review of the Resilience Support Facility (RSF).
The mission is led by Iva Petrova and, according to official sources, will stay for almost two weeks, until the first week of October. Pakistan is currently in a 37-month IMF programme aimed at stabilising the economy through fiscal discipline, structural reforms and measures to support long-term growth.
Much rides on the outcome. If both reviews are completed successfully, Pakistan becomes eligible for about $1 billion (760 million Special Drawing Rights) under the EFF and a further $200 million under the RSF. The two payments total $1.2 billion and would be disbursed by the end of November or in early December.
While the talks get under way, a separate question about government financing has drawn attention. Adviser to the Finance Minister Khurram Schehzad said on Sunday that the government is not buying any aircraft for Pakistan International Airlines (PIA), which was privatised through an auction in December last year. He was responding to claims on social media that a minister was arranging sovereign-linked financing for the jets.
Those claims followed a recent meeting between Finance Minister Aurangzeb and US Export-Import (Exim) Bank Chairman John Jovanovich, held on the sidelines of the 81st session of the United Nations General Assembly in New York. The finance ministry said the two discussed the Reko Diq mining project and funding options for an aircraft for PIA. Aurangzeb also shared PIA’s interest in Boeing’s 787 Dreamliners and sought support for a financing package covering aircraft and engines.
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Schehzad explained that US Exim’s mandate, like that of export credit agencies elsewhere, is to support its own country’s exports and jobs. Boeing aircraft are US exports, he said, and the bank finances foreign buyers of US-made aircraft through established structures. Its framework allows asset-backed financing secured against the aircraft itself, with credit assessed on the airline, the lessee or any guarantor, so a sovereign guarantee is not an automatic requirement.
He added that the discussions with US Exim went well beyond PIA. They covered potential financing across aviation, refinery upgrades and Reko Diq, as part of a broader Pakistan-US economic engagement. Schehzad said, “The government is neither buying aircraft for a privatised PIA.”
Managing Editor at Global News Pakistan (GNP), with a Bachelor's degree in International Relations from Riphah International University, graduated with a Gold Medal. Reach out at sabahtareengnp@gmail.com
