IMF sends Letter of Intent for release of $1.2 billion tranche

ISLAMABAD: The Finance Ministry has received a much-awaited Letter of Intent (LoI) from the International Monetary Fund (IMF), which will give way to the release of the next $1.2 billion loan tranche.

The Lol will be signed by the Federal Minister of Finance and Revenue and Governor State Bank, and will be promptly returned to the IMF. The signed LoI will be presented to the Board of Directors, alongside the documents of the staff level agreement, during the meeting in Washington DC, late August.

The contents of the letter indicate that Pakistan has made progress in getting closer to reach a deal with the global lender for the $1.17 billion loan tranche.

It should be noted that the IMF and Pakistan had reached a staff level agreement in July, which is also expected to be reviewed in the Fund’s board meeting in late August.

The government has already implemented most of the requirements for the loan tranche, as stated under the staff level agreement between the two parties. To satiate the IMF’s demands, the federal government increased the rate of petroleum development levy on petroleum products from the beginning of August.