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Pakistan plans to seek a new loan of at least $6 billion from the International Monetary Fund (IMF) to address looming debt repayments amid concerns of an economic crisis following a contentious election. The nation aims to negotiate an Extended Fund Facility (EFF) with the IMF, with talks expected to commence in March or April. Facing $25 billion in external debt payments in the upcoming fiscal year, Pakistan's foreign-exchange reserves are strained. The new IMF program aims to ensure balance of payment and debt sustainability, privatize state-owned enterprises, and increase tax revenues. Failure to secure the loan could escalate external liquidity stress and default risks. However, challenges exist, as jailed former leader Imran Khan seeks an independent audit of election results before IMF discussions proceed. Despite Pakistan's history of IMF bailouts, the amount of funding remains subject to negotiation between the IMF and the incoming government. The IMF stands ready to assist Pakistan in addressing its economic challenges, including revenue enhancement, energy sector reform, exchange rate liberalization, state-owned enterprise overhaul, and climate resilience. Source : Bloomberg https://lnkd.in/dNYPhvHc

Ecuador Bonds Jump on $4 Billion Loan Agreement With IMF - Latest deal comes amid fiscal, economic and electricity crises - Staff-level accord over four-year loan needs board approval Stephan Küffner and Maria Elena Vizcaino Ecuador bonds led gains among emerging-market peers Thursday after the nation reached a deal with the International Monetary Fund for a four-year loan of about $4 billion. Notes due in 2030 jumped 1.5 cents to 53.2 cents on the dollar, the highest since June 2022 The staff-level agreement, which still requires approval from the IMF board, provides liquidity amid a series of crises weighing on President Daniel Noboa’s short time in office. The deal is designed to help the nation to remain current on its $16 billion in outstanding bonds. A previous $7.5 billion IMF deal that ended in December 2022 allowed the South American nation to move forward with debt restructuring and was the first Ecuador completed successfully in more than two decades. But the country has struggled to rein in public spending and raise oil output. Now Noboa is fighting an internal war on drug gangs and struggling to meet government spending requirements as drought has severely reduced hydroelectric power generation. Still, bonds have returned 60% so far this year as market-friendly Noboa banked on his popularity to raise taxes and pledge to reduce the fiscal deficit. Noboa, 36, was elected to serve out the term of Guillermo Lasso, who dissolved parliament to avoid impeachment in mid-2023, triggering snap elections. His bid for reelection next year received a shot in the arm on Sunday, when voters approved nine of 11 referendum questions related to security. Two economic reform proposals failed to pass. Read more: https://lnkd.in/ea-DwQM7

Sri Lanka Repays $1.3 Billion to Multilateral Lenders Since President's Tenure Since President Ranil Wickremesinghe assumed office in July 2022, Sri Lanka has repaid a total of $1,338.8 million to multilateral lenders. Rajith Keerthy Tennakoon, President Director General of Community Affairs, disclosed that repayments included $760.1 million to the World Bank, $489.9 million to the Asian Development Bank, and $22.3 million to the European Investment Bank. Additionally, $22.9 million was repaid to the OPEC Fund for Development, $17.9 million to the International Fund for Agricultural Development, $9.8 million to the IMF, $7 million to the Asian Infrastructure Development Bank, and $1.7 million to the Nordic Development Fund. Despite Sri Lanka's default declaration in April 2022, international practice mandates servicing debts to multilateral lenders, including the IMF. However, Sri Lanka still faces arrears, including $2,250 million to International Sovereign Bond holders, $1,770.8 million to bilateral creditors, and $430.3 million to the China Development Bank, according to a debt update from the Finance Ministry. ~ Source - President's Media Division , Economynext

The International Monetary Fund (IMF) has approved the first review of Ethiopia’s $3.4 billion loan program, unlocking a $340.7 million disbursement. This decision follows Ethiopia’s efforts in implementing key reforms, including floating its currency, the birr, and advancing its debt restructuring plan. The IMF's four-year financing agreement, initiated in July, is aimed at stabilizing the country’s economy. Last month, a staff-level agreement was reached, which has now been ratified by the IMF board. While the Ethiopian government is pushing to make significant progress on its debt restructuring by December, investors holding the country’s $1 billion Eurobond have opposed a proposed 18% reduction in repayment. The IMF plans to closely monitor Ethiopia’s economic reforms, with particular attention to the foreign exchange market, and has scheduled frequent reviews to ensure progress.

IMF approves $7bn loan to cash-strapped Pakistan: The International Monetary Fund (IMF) has approved a $7bn (£5.25bn) loan to cash-strapped Pakistan. The country is due to receive the first $1bn of the loan immediately, with the balance to be paid out over the next three years. Prime Minister Shehbaz Sharif welcomed the decision and thanked the head of the IMF, Kristalina Georgieva, and her team. Pakistan has taken more than 20 loans from the IMF since 1958 and is currently its fifth-largest debtor. The new programme “will require sound policies and reforms” to stabilise and help make the economy more resilient, the IMF said. The South Asian nation has pledged that it would be the last loan from the international lender. As part of the deal, Islamabad agreed to a number of unpopular measures, including increasing the amount of tax it collects from people and businesses. The country has relied on IMF loans to meet its needs for decades and continued to struggle after years of financial mismanagement. Last year, the country was on the brink of defaulting on its debts and had barely enough in foreign currencies to pay for a month of imports. The IMF approved a $3bn bailout for Pakistan in July 2023. It also received funds from allies Saudi Arabia and the United Arab Emirates (UAE). At the time, Mr Sharif said the bailout was a major step forward in efforts to stabilise the economy. “It bolsters Pakistan’s economic position to overcome immediate to medium-term economic challenges,” he said. The post IMF approves $7bn loan to cash-strapped Pakistan appeared first on The Namibian.

The International Monetary Fund's executive board is set to meet on July 29 to discuss Ethiopia's request for a new fund-supported program. The meeting is unusual because a staff-level agreement has not yet been announced, which is typically a step before an executive board vote. Official creditors have provided financing assurances to help fast-track the approval process. An IMF bailout would require Ethiopia to restructure its debt using the G20's Common Framework mechanism and negotiate a deal with private creditors. Ethiopian Prime Minister Abiy Ahmed has said he expects talks with the IMF and World Bank to unlock over $10 billion in financing in the coming years. https://lnkd.in/dwB6eQDj

Good piece by Shahbaz Rana shedding light on the initiative to restructure and reprofile Chinese loans in Pakistan. While this move provides immediate fiscal relief and aids in securing an IMF bailout package, the country still faces challenges in enhancing productivity and competitiveness for for achieving economic sustainability in medium and long-term. The short-term solution aims to reduce annual forex outflow and potentially lower electricity prices. However, the absence of a clear roadmap to boost export earnings raises concerns about meeting future obligations, even if China agrees to restructure the debt. Relying on debt restructuring and external aid like IMF bailouts underscores the need for a more self-sustaining economic model. Strategic planning is crucial to enhance export earnings through industrial productivity improvements, export diversification, market access, and fostering a business-friendly environment. Comprehensive structural reforms, including investments in key sectors like manufacturing, agriculture, technology, and services, are vital. Building a robust tech-enabled start-up ecosystem is essential for creating a 21st-century innovation economy, attracting domestic and foreign investments, enhancing competitiveness, and driving economic growth. Check out the full article by Shahbaz Rana for more insights: https://lnkd.in/g7tHPnDU

Western debt trap: As a condition for a bailout, the US-controlled IMF demanded that Pakistan borrow from a private Western bank. A British Standard Chartered is charging Pakistan 11% interest. The average interest rate on China's loans to low-income countries is ONLY 2%.

🌏 IMF Loan Review: What It Means for Bangladesh's Economy and Capital Market 🌏 The International Monetary Fund (IMF) is set to review Bangladesh's progress in meeting the conditions for the fourth tranche of its $4.7 billion loan program. This is a pivotal moment for the country's economic landscape, with potential implications for capital market investors. 📊 Key points to consider: ✔️ A positive review could reinforce investor confidence, signaling progress in fiscal reforms and economic stability. ✔️ However, if the review identifies challenges in meeting loan conditions, it might lead to cautious sentiment or market volatility. As someone deeply connected to the finance industry, I believe this review reflects not just our economic resilience but also the importance of strong governance and fiscal policy. Why does this matter? Investors in Bangladesh's capital markets closely follow such developments as they directly impact market dynamics, risk assessments, and potential returns. 🔍 Read the full article here: https://lnkd.in/gP4r4hQk What are your thoughts on how IMF reviews shape investor sentiment in emerging markets like Bangladesh? Share your perspective in the comments below! 👇

📈 Good News for Pakistan! 📈 Fitch Ratings has upgraded Pakistan’s Long-Term Issuer Default Rating to ‘CCC+’, up from ‘CCC’, thanks to the recent $7 billion IMF agreement. This upgrade reflects stronger external funding confidence and positive economic forecasts. With significant external financing secured and expected improvements in reserves and fiscal balance, Pakistan is on a path to economic stability. 🌟 #fitchratings #pakistanfinance #economicupdate #imf #ratingupgrade #financialnews #economicgrowth #pakistan #globalfinance #financialstability #externalfunding #investment #economy https://lnkd.in/d6EmHHnp