Pakistan, IMF to reach staff-level agreement by next week: Ishaq Dar
Federal Minister for Finance and Revenue Ishaq Dar on Thursday said that Pakistan is expected to sign a staff-level agreement with the International Monetary Fund (IMF) by next week.
The senator reiterated on social media that Pakistan would not default on its payment obligations.
“Anti-Pakistan elements are spreading malicious rumors that Pakistan may default. This is not only completely wrong, but also belies the facts.
The federal minister shared that the State Bank of Pakistan’s (SBP) foreign exchange reserves are on the rise and are “nearly $1 billion higher than four weeks ago despite paying all external dues on time”.
Besides this, foreign commercial banks have also started extending facilities to Pakistan, Dar said.
“Our talks with the IMF are nearing completion and we expect to sign the staff-level agreement with the IMF by next week. All economic indicators are slowly moving in the right direction.
Dar’s statement came after the Pakistani rupee depreciated nearly 6.6%, or Rs 19, against the US dollar on Thursday, as the cash-strapped country struggles to unlock crucial funding from the IMF amid economic turmoil.
Rupee hits new record low of 285.09 per dollar.
Pakistani economy is going through its most challenging phase as it is facing balance of payments crisis.
The South Asian nation has only $3.25 billion in reserves left, barely enough for three weeks of essential imports. While experts are urging the government to revive the stalled IMF programme, policymakers have one eye on inflation and the other on political capital in the form of general elections.
Already, Islamabad has moved to implement inflation-stimulating steps to please the IMF, including higher energy tariffs and 170 billion rupees in taxation measures. However, a staff-level agreement between the IMF and Pakistan is yet to be reached.
Additionally, the SBP decided to convene an emergency meeting of the Monetary Policy Committee (MPC) on Thursday to deal with the emerging risks to the economy due to uncertain growth. It raised the key interest rate by 300 basis points to 20%.
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