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Islamabad: The International Monetary Fund (IMF) has imposed new conditions on Pakistan to revive the program.
According to Express News, it is an unusual situation when the IMF imposes more conditions and no agreement is reached, however, a staff-level agreement is expected to be reached with the International Monetary Fund this week.
The FBR has also issued an explanatory circular on the additional taxes worth Rs 177 billion under the mini-budget released by pre-implementing IMF conditions.
The International Monetary Fund (IMF) has called for the implementation of four preliminary measures, including an increase in electricity prices by Rs. What is it.
The government has called a meeting of the State Bank’s Monetary Policy Committee on Thursday to meet the IMF’s interest rate conditions, while progress is also expected on the rest of the conditions, after which a meeting between Pakistan and the IMF will be held on Thursday Virtual negotiations are likely to make significant progress.
In this meeting, the Pakistani authorities will provide an orientation on the policy rate hike and other preliminary measures, including electricity surcharges and price increases. Finance Ministry officials say the staff agreement between Pakistan and the IMF is expected by Friday, but sources say under the IMF’s terms, interest rates are expected to increase by 2 to 2.5 percent.
The IMF board meeting is expected three to four weeks after the staff-level agreement between Pakistan and the IMF.
Read more: Monetary policy meeting called two weeks ahead of schedule to raise interest rates
Sources say that now the IMF has imposed new conditions on Pakistan and a new draft Memorandum of Economic and Finance Policy (MEFP) is being given to Pakistan every day. Changes are made and more demands are made.
Sources have said the finance ministry is ready to impose the surcharge for four months, but the IMF is adamant on the condition of imposing the surcharge on a permanent basis and the IMF is against temporary measures. According to the sources, the demand from the IMF to raise the interest rate before the staff agreement remains, however, the state bank has called the monetary policy board meeting on Thursday to raise the interest rate. The IMF has insisted on fixing the interest rate in line with the headline, so it is likely that the rate will be raised by two to two and a half percent.
According to the sources, Pakistan is ready to set the interest rate according to inflation, while the IMF is willing to link the exchange rate to the Afghan marginal rate, according to the sources, even on the data of primary deficit and current account deficit There are differences. Pakistan wants to set a deficit target based on 7-month data, but the IMF asks to set a target on its own.
In addition to this, the IMF also asks for a written assurance of external financing. Sources say Finance Minister Ishaq Dar has also held an important virtual meeting with US officials and has asked to play a role in the IMF program. A staff-level agreement is likely to be reached this week.
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