Amid the massive exchange rate depreciation, the imposition of power surcharge and a 300 basis points a day increase in the policy rate. All eyes are now on a staff-level agreement with the IMF deal to avoid a default.
Now senior officials of Pakistan and the IMF have approved the Draft Memorandum of Economic and Fiscal Policies to complete the 9th review. And issue a $1 billion tranche under the $6.5 billion Expanded Fund Facility are finalizing the completion.
Top government sources said that there is no possibility of terminating the ongoing EFF program at this stage as the fund’s staff also consider that the various drastic measures taken by the government of Pakistan to stabilize the economy and It will help avoid default till June 30, 2023. On Thursday, Finance Minister Ishaq Dar tweeted that anti-Pakistan elements were spreading malicious rumors that Pakistan might default.
This is not only an outright lie but also belies the facts. Despite paying all external liabilities on time, the State Bank’s foreign exchange reserves are growing. And are almost US$1 billion higher than four weeks ago.
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All the economic indicators are gradually moving in the right direction. Reacting to PTI Chairman Imran Khan, Dar also tweeted and alleged that Imran Khan is responsible for this economic disaster.
Sources say that on the IMF front, the Pakistani side informed by the IMF that they are not changing the goalposts of IMF deal. But the Pakistani authorities are delaying the much-needed structural reforms.
The official said the IMF has asked Pakistan to stick to a market-based exchange rate policy, eliminate the monster of revolving credit through the imposition of surcharges and further tighten monetary policy.