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IMF ties $3bn loan to removal of fuel subsidies

Negotiations between the government and the International Monetary Fund (IMF) have concluded, and the IMF has subjected the $3 billion economic relief program for Pakistan with the removal of fuel subsidies. The Pakistani delegation failed to convince the IMF, as both sides could not reach a staff-level agreement despite week-long negotiations in Doha, Qatar, from May 18-25. According to sources, IMF has refused to issue loans to Pakistan until they remove all subsidies on fuel prices in the country. The issue of the $3 billion economic relief program to the Pakistani government has been linked to the removal of subsidies over fuel prices. Pakistan is looking for the release of $3 billion from the IMF. That amount would augment the nation’s foreign-exchange reserves, which at $10.2 billion covers less than two months of imports. The government is staring at a $45 billion trade deficit this year. The revival was expected to bring stability to the financial markets, the fast-weakening Pakistani rupee, and the depleting foreign exchange reserves, as the government had pinned hopes on the programme’s resumption. agencies

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