The government in Islamabad has said it is making good progress with the International Monetary Fund (IMF) and hopes to get board approval in September for a new $7 billion loan programme.

“We are making good progress with the IMF for Board approval in September,” Finance Minister Muhammad Aurangzeb said on Wednesday in a text message to Reuters.

The federal minister’s remarks come as the country is so far unable to sign a Letter of Intent (LoI) for making a formal request to the Washington-based lender’s executive board for considering approval of $7 billion under the Extended Fund Facility (EFF) programme.

The finance czar and the State Bank of Pakistan (BSP) governor Jameel Ahmad are supposed to sign the LoI on behalf of the government and the commitment would be dispatched to the IMF’s executive board with a request for approving $7 billion under the EFF programme of 37 months.

It should be noted here that Pakistan and the IMF had struck a staff level agreement on the 37-month loan programme on July 12, 2024, with the country hoping that its request would be considered for approval by the IMF’s executive board in four to six weeks.

The IMF said the programme was subject to approval from its executive board and obtaining “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners”.

Islamabad again faces external financing as major stumbling block in the way for securing fresh bailout package from the IMF.

Pakistan is in talks with Saudi Arabia, the United Arab Emirates (UAE) and China to meet gross financing needs under the IMF programme, Aurangzeb said in July following a trip to China to seek energy sector debt reprofiling.

Rollovers or disbursements on loans from Pakistan’s long-time allies, in addition to financing from the IMF, have helped Pakistan meet its external financing needs in the past.

The global lender earlier this week issued calendar for executive board’s scheduled agenda items. However, the Fund has not included Pakistan into list of countries for which the IMF board would consider approval of loans till August 28, 2024.

The IMF did not immediately respond to a Reuters request for comment on Pakistan’s external financing needs and the executive board’s meeting on Pakistan’s loan programme.

During an analyst briefing following the central bank’s decision in July to cut rates by 100bps, the central bank chief said he expected rollovers of $16.3 billion in the fiscal year to June 2025 — more than half of Pakistan’s $26.2 billion external financing requirement.