Pakistan minister cancels US trip, says IMF bailout on track

Pakistan finance minister Ishaq Dar on Saturday (8) said he had cancelled his trip to Washington for the spring meetings of the International Monetary Fund and World Bank on the orders of the prime minister due to the political situation in the country.

However, Dar said he would attend important bilateral and multilateral meetings virtually and a Pakistani delegation would be present in Washington.

Pakistan is in danger of defaulting on its debt, with an International Monetary Fund bailout programme stalled since November, while a bruising political battle is raging between the government and former prime minister Imran Khan.

Dar said that the crisis had been compounded by a recent Supreme Court order striking down plans to delay elections to two provincial assemblies scheduled for next month. The order has created a standoff between the government and the court.

"We are stuck in a strange mess as a country… so under these circumstances, on the orders of the prime minister, I have dropped plans to be there [in Washington] physically," Dar said in a televised address.

The minister rejected reports of the cancelled trip being linked to a holdup in Pakistan's IMF bailout programme.

He added that a "constitutional crisis" was created by the Supreme Court, which has demanded that the government provide Rs 21 billion ($74 million) to the election authorities by Monday (10) to conduct the polls.

Dar said that Pakistan, on its part, had completed all requirements of the IMF's programme review for the release of over $1.1 billion in critical funding for the cash-strapped country.

He said all that remained was a confirmation by one country that it would provide Pakistan $1 billion to shore up its external account requirements. Another country had already confirmed it would provide $2 billion, he added.

While Dar did not name the two countries, Pakistan's junior finance minister on Thursday (6) said Saudi Arabia had conveyed to the IMF its commitment to provide financing to Pakistan.

Local media has widely reported that $2 billion have been committed by Saudi Arabia, while a confirmation of $1 billion was awaited by the United Arab Emirates.

The minister said once the $1 billion was confirmed, a staff level agreement would be reached. He denied that there were any other pending issues.

Pakistan is in dire need of funds with its foreign exchange reserves hovering around $4.2 billion which provides barely one month of import cover.

(Reuters)