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The U.S. State Department has approved the potential sale of ammunition and logistics support to Taiwan in two separate deals valued at up to $440 million, the Pentagon said on Thursday.

Taiwan has asked to purchase 30mm ammunition, including high-explosive incendiary-tracer rounds, multi-purpose rounds and training rounds, for an estimated cost of $332.2 million, the Pentagon said.

The principal contractors will be Alliant Techsystems Operations and General Dynamics (GD.N), it said.

Taiwan has also asked to buy a Blanket Order Cooperative Logistics Supply Support Arrangement for an estimated cost of $108 million, the Pentagon said.

The logistics arrangement will support the purchase of spare and repair parts for wheeled vehicles, weapons and other related elements, it said.

The Pentagon's Defense Security Cooperation Agency notified Congress of both of the possible sales on Thursday.

In a statement on Friday, Taiwan's defence ministry said the sales would boost the island's resilience against China's "expanding threats of military and grey zone tactics", which it said has posed "severe threats" to Taiwan.

Taiwan's defence ministry has said China continued to use "grey zone" tactics to test its responses, including sending drones, balloons and fishing boats to areas near Taiwan. (Reuters)

The International Monetary Fund (IMF) has reached a staff-level pact with Pakistan on a $3 billion stand-by arrangement, the lender said, a decision long awaited by the South Asian nation which is teetering on the brink of default.

The deal, subject to approval by the IMF board in July, comes after an eight-month delay and offers some respite to Pakistan, which is battling an acute balance of payments crisis and falling foreign exchange reserves.

Following are some reactions to the deal:

MURTAZA SYED, FORMER DEPUTY GOVERNOR OF THE STATE BANK OF PAKISTAN

"The SBA (stand-by arrangement) provides Pakistan with much needed short-term cover, in the lead up to and immediate aftermath of the upcoming elections. As long as Pakistan remains on track under the SBA’s reviews, it should catalyze additional financing from bilateral and other multilateral sources.

"In this way, we should be able to meet the external debt repayments coming due in the next few months. It is not the end of our relationship with the IMF though, as the SBA is a short-term bridging operation. The new government will almost definitely need to negotiate another long-term EFF programme with the IMF after the elections, as our balance of payments and external debt repayment problems are of a more protracted nature.

GARETH LEATHER, SENIOR ASIA ECONOMIST AT CAPITAL ECONOMICS, LONDON

"The agreement of a loan deal between Pakistan and the IMF should put the economy back on a more secure footing and limit the biggest downside risks.

"However, past experience suggests that the government will struggle to stick to the tough spending promises it has agreed to. There is a strong risk that Pakistan reneges on the deal once the immediate crisis has passed.

"One obvious trigger is the upcoming general election, due to be held no later than November. Even if Prime Minister Shehbaz Sharif is committed to a deal, he could be out of office before the end of the year and replaced by someone less committed to the agreement."

ABDUL ALEEM, CHIEF EXECUTIVE AND GENERAL SECRETARY AT OVERSEAS INVESTORS CHAMBER OF COMMERCE AND INDUSTRIES, KARACHI

"We see it as a significant supportive move which was long awaited to remove the perpetual uncertainty in the economic landscape of the country.

"While the State Bank had managed the delicate situation remarkably well but certainly the hard measures dented the confidence of investors and reputation of the country as a destination for new foreign direct investment."

SAKIB SHERANI, FOUNDER AND CHIEF EXECUTIVE AT MACRO ECONOMIC INSIGHTS, ISLAMABAD

"Its clear the EFF has ended unsuccessfully. The SBA gives a temporary lifeline to this government and the new one post-elections. The successor government will have to negotiate a fresh, longer term arrangement with the Fund"

SHAHBAZ ASHRAF, CHIEF INVESTMENT OFFICER AT INVESTMENT COMPANY FRIM VENTURES, KARACHI

"Capital market investors will celebrate this development, currency market should stabilise. However, interest rates are expected to remain higher for longer. Eurobonds may rally.

"Few more measures like lifting import restrictions and higher electricity tariff may be seen in the near term. Circular debt in the power sector might remain flat, if not lower led by this development"

MAHA RAHMAN, ECONOMIST AND FORMER DIRECTOR POLICY AT MAHBUB UL HAQ RESEARCH CENTER, LAHORE

"Much needed relief that we have been hoping for for a year. I hope we can utilise this space to make prudent decisions so that we are not at the edge of our seats, like the previous year, ever again.

"IMF's agreement in particular refers to energy sector reforms. The team will now steer the government to make decisions that will usher in more fiscal prudence."

ZAFAR MASUD, CEO AT BANK OF PUNJAB, LAHORE

"It's important to see how much of the 3 billion is being disbursed upfront and what conditionalities are attached to the remaining tranches. Our target shall be that the next IMF programme should be the last one and it would be a great opportunity to correct our fiscal account once and for all."

MUSTAFA PASHA, CHIEF INVESTMENT OFFICER AT LAKSON INVESTMENTS, LONDON

"The 3 billion SBA is a much better outcome for Pakistan (as opposed to the 9th review) as it means the country actively stays in an IMF programme till March 2024 during which a transition to a new government is expected and which would have been a period of uncertainty.

"This increases the probability of funding from bilateral/multilateral partners materialising in the quantum and timeline the country needs in order to meet its dollar obligations.

SHAHID HABIB, CEO AT INVESTMENT COMPANY ARIF HABIB LTD, KARACHI

"The new 9-month SBA is a major positive and will significantly reduce risks and uncertainties and serve as a source of comfort to investors and lenders. It will also allow access to funding from other multilateral and bilateral partners which is essential given Pakistan has about USD 9.0 billion of debt repayments including USD 4 billion of sovereign rollovers until December."

MUSADAQ ZULQARNAIN, CHAIRMAN AT INTERLOOP HOLDINGS, ONE OF THE LARGEST TEXTILE MANUFACTURERS IN PAKISTAN

"The 9 month SBA for $3 billion will bring some badly needed relief in the short term. Although the budget has created further difficulties for the corporate sector and the cost of doing business has gone out of the roof, the biggest problem has been the uncertainty and volatility in the market.

"This agreement will at least provide some stability for next few months."

MOHAMMED SOHAIL, CEO OF BROKERAGE FIRM TOPLINE SECURITIES, KARACHI

"This new programme is far better than our expectations. There were a lot of uncertainties on what will happen after June 2023 as there will be a new government coming to power. Now, this funding of 3 billion dollars and for 9 months will definitely help restore some investor confidence.

"The newly elected government, likely by Nov/Dec, will have some time to evaluate the economic situation and decide on the way forward (bigger IMF loan with or without debt restructuring/reprofiling)."

AHFAZ MUSTAFA, CEO OF BROKERAGE FIRM ISMAIL IQBAL SECURITIES, KARACHI

"It also means that at this point no local/foreign restructuring of debt is on the cards. We have to wait for more details to come and see if any prior actions have to be fulfilled before the board meeting, but these are absolutely steps in the right direction for the economy."

SAJID AMIN JAVED, DEPUTY EXECUTIVE DIRECTOR, SUSTAINABLE DEVELOPMENT POLICY INSTITUTE, ISLAMABAD

"The SBA will come with even more tough conditions of sharp energy price hikes, completely market driven exchange rate, and others. But, Pakistan has no other way to come out of this crisis. We need IMF backing up.

"Things would have been much better if successive governments would have invested in completing the IMF programme. It will have avoided all the uncertainty, panic in market and pressure on currency." (Reuters)

Australian and European Union trade ministers spoke on Thursday evening, a source familiar with the matter told Reuters, as optimism builds that sticking points over a free trade agreement (FTA) can be overcome with more negotiation.

A trade deal with the EU, a market of around 450 million consumers, would be a significant boost for Australia's push to diversify its export markets, after major trading partner China imposed blocks on a raft of Australian agricultural products in a 2020 political dispute.

Negotiations between Trade Minister Don Farrell and EU Trade Commissioner Valdis Dombrovskis stalled in Brussels in June.

However, Australian assistant trade minister Tim Ayres said on radio on Friday another meeting could be held in the next fortnight.

"I think it's likely that there will be a return to ministerial-level negotiations," Ayres told ABC Radio.

"There has to be a very clear indication on the European side that we're going to make commercially meaningful access in terms of agriculture," he added.

The source told Reuters that Farrell and Dombrovskis spoke on Thursday evening.

Farrell has previously said Australia wants better access for Australian beef, sugar and sheep meat before it signs a deal.

Agriculture Minister Murray Watt will meet with the EU agriculture commissioner, and ministers from several European nations, to push for better market access for Australian producers when he attends the United Nation's Food and Agricultural Organisation conference in Rome this week, he said.

"We believe it is possible to reach an agreement which benefits both Australia and the EU and we will continue striving to achieve that," Watt said in a statement on Friday.

There is optimism that an agreement could be struck by mid-year.

Dombrovskis wrote in a Tweet he had discussed the FTA in a meeting with the European Australia Business Council, a business organisation, in Brussels on Wednesday, and sent his condolences on the sudden death in Germany on Sunday of the council's chairman Simon Crean, a former Labor party leader. (Reuters)

A senior U.S. official charged with handling ties with the Asia-Pacific Economic Cooperation (APEC) bloc visited Taiwan this week for talks on his country's plans to host the grouping this year, the de facto U.S. embassy in Taipei said on Friday.

APEC is one of the few international organisations to which Chinese-claimed Taiwan belongs, since Beijing, which views the island as a Chinese province, and not a country, blocks its participation in most others.

Against the backdrop of military tension between Beijing and Taipei, past APEC summits have served as a rare conduit for direct engagement between Taiwan and China, which is also a member.

The U.S. official, Matt Murray, visited Taiwan on Tuesday and Wednesday to discuss with senior officials issues related to APEC and the robust U.S.-Taiwan economic relationship, the American Institute in Taiwan said in a brief statement.

Murray discussed topics such as high-level meetings set for August in Seattle on aspects of disaster preparedness, food security, health and the economy, energy, women and the economy, and small and medium enterprises, the statement added.

It did not say whom he had met while in Taiwan.

The main leaders' summit will take place in San Francisco in November.

Taiwan presidents do not attend APEC summits, but the island is represented either by senior former officials or business leaders, such as Morris Chang, founder of semiconductor maker TSMC (2330.TW), who went to the Bangkok summit last year.

Chang had a brief conversation with Chinese President Xi Jinping at the time, and also discussed semiconductors with U.S. Vice President Kamala Harris. (Reuters)