Dollar bonds of Pakistan were down ~4% after the IMF team held positive talks but stopped short of unlocking its $1.1bn bailout deal. The IMF team said that it welcomed the nation’s commitment to implement policies to safeguard macroeconomic stability and that virtual talks would continue towards reaching a deal. Pakistan’s economy has been under financial difficulty and its floods last year have only worsened its situation, requiring it to receive bailout funds from the IMF. Besides, the IMF’s stalled instalment, another $1.4bn of the overall $6.5bn bailout program that ends in June, is yet to be given. IMF requires Pakistan to show a strengthening in its fiscal position with permanent revenue measures and reduction in untargeted subsidies. At the same time, it is looking for Pakistan to scale-up social protection to help those affected by the floods.
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