According to media reports, IMF is demanding further adjustments in the monetary policy, exchange rate and a 22% increase in power tariff to control the circular debt.
Pakistan and International Monetary Fund (IMF) made contact through video conferencing on Thursday, confirmed government officials.
Both the IMF and Pakistani side, on Thursday night, confirmed that they made efforts to inch towards evolving a consensus on the next bailout package for Pakistan’s struggling economy.
The Delegations of the Pakistani government and International Monetary Fund (IMF) discussed various terms regarding the unavoidable bailout package in view of the worsening economic crisis, claimed media reports. IMF remains as the last resort for Pakistan.
According to different sources, Islamabad’s wishes to get the loan approved by January 15th may not be satisfied as the Fund wanted Islamabad to adopt steeper measures before its case could be sent for approval to the Executive Board of the IMF.
Asad Umar informed the IMF about the recent developments on the exchange rate and the monetary policy.
The local currency was devalued by Rs. 4 (3.0 percent) to Rs. 137.7 to a dollar by the State Bank. It also increased the interest rates by 1.5 percent, reaching 10 percent.
The IMF called for a 22% hike in power tariff to address the problem of circular debt and even though the government has already raised them by Rs. 1.27 per unit but the notification hasn’t yet been issued yet.
IMF appreciated both the decisions but urged Pakistan to continue these necessary actions to address the external sector imbalances.
They also called for a more devaluation of the rupee and changes in the monetary policy, said sources.