Deadline for Pakistan expiring today what will happen now default or relief

It is being told that this deal is yet to be approved by the IMF board. After a delay of eight months, this decision can give relief to Pakistan. The country is currently grappling with a serious balance of payments crisis and depleting foreign exchange reserves. “The new standby agreement builds on Pakistan’s 2019 Extended Fund Facility-supported program which expires at the end of June,” said IMF official Nathan Porter.

Only got one billion dollar help
Pakistan is to receive the loan from the IMF in tranches with four quarterly and four half-yearly reviews. This loan was linked to the IMF’s standards necessary to accelerate economic reforms in the country. A loan of about $6 billion was approved for Pakistan under the Extended Fund Facility (EFF), with a deadline of October 2, 2022. Later this deadline was extended till June 30. The IMF’s Executive Board approved a loan amount. This amount was 210 percent of Pakistan’s debt withdrawal capacity. Pakistan was hopeful that it would get this loan in a phased manner. Also, it was expected to get more than $38 billion from other international agencies. But only one billion dollars has been given as immediate relief.

Defense budget cut demand
The IMF has repeatedly demanded cuts in the defense budget from Pakistan. Till August 2022, Pakistan was getting loan tranches as it could meet the criteria established by the IMF. But Pakistan’s economy collapsed as it grappled with Covid, and then a political crisis erupted after Imran Khan stepped down as prime minister, along with the Ukraine war. Due to its internal conditions, Pakistan failed to act on the terms of the IMF. Due to this, the ninth review meeting and the installment of $ 1.1 billion related to it was delayed. This review meeting is stuck since November 2022. Also there is no Pakistan agenda for this month in the IMF calendar.