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Saturday, May 18, 2024

Pakistan-IMF to reach an agreement next week

Finance Minister Ishaq Dar said on Thursday that Pakistan’s negotiations with the IMF related to the completion of the ninth review of a $7 billion loan program are near conclusion and the staff-level agreement will be signed by next week.

The government is trying every possible way to implement measures to reach an agreement with the IMF as the country’s reserves are barely enough for three weeks of controlled imports. 

The finance minister said that the State Bank of Pakistan’s (SBP) forex reserves had been increasing and were almost $1 billion, higher than four weeks ago despite making all external due payments on time.

He further added; 

“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,” 

Read more: Record-high inflation at 31.6%

Moreover, the rupee sank sharply by Rs18.74 against the dollar in the interbank market today, attributing a record drop of 7.04%.

Furthermore, IMF’s $7 billion loan program has also been delayed since last year over a policy framework. The $1.2 billion economic bailout would not only unlock the disbursements but also direct inflows from friendly countries. However, the Fund has set tough conditions for the government to release a loan installment such as; raising taxes, fuel price hikes, and removing the artificial cap on the exchange rate. 

Read more: SBP prepones MPC meeting to March 2

Additionally, the State Bank of Pakistan had also called the Monetary Policy Committee meeting today, to discuss measures to revive the stalled IMF program. The Fund has suggested facilitating poor people and had been insisting to tax the rich and subsidize the poor. 

However, the inflation for the month reached a record-high at 31.6%, the highest since 1998, the price hike has severely hit the low-income segment of society. 

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