Pakistani Finance Minister Ishaq Dar on Thursday said that Islamabad was set to sign a deal for a fresh tranche of $1.2 billion with the International Monetary Fund after their talks reached a near conclusion stage this week.
Pakistan is in dire need of fresh funds amid a worsening financial crisis, considering the Pakistani rupee is in freefall and its forex reserves have remained just over or below the $3 billion mark for months.
Talks between the Shehbaz Sharif government and the global lender have been going on for weeks after the two failed to reach an agreement last month, when an IMF delegation visited Islamabad.
Among the measures demanded by the multilateral organization from Pakistan were an increase in revenues by levying new taxes and an immediate hike in the Central Bank's interest rate, both of which were implemented by Islamabad this week.
Against this backdrop, Dar dismissed the ever-increasing rumors regarding a Pakistani sovereign default.
"Foreign commercial banks have started extending facilities to Pakistan. Our negotiations with IMF are about to conclude and we expect to sign Staff Level Agreement with IMF by next week. All economic indicators are slowly moving in the right direction," he added.
The long-delayed $1.2 billion disbursement from the IMF is part of a long-running $7 billion loan program and was scheduled to be disbursed last year. However, as talks between Pakistan and the US-based lender broke down, the latter withheld the amount.
Previously, Pakistan fulfilled the IMF's other demands, including removing subsidies from petroleum products, removing tariff caps on the power sector, and withdrawing its control over the Pakistani rupee-US dollar exchange mechanism.