March, 21, 2023
International Monetary Fund

International Monetary Fund

The international organization is keeping new conditions, except for China, other regional countries also stand with the IMF, there is no possibility of a staff-level agreement this week too: Finance Ministry sources.

Virtual meeting of Finance Minister Ishaq Dar with US Deputy Finance Minister Mr. Wali Adimu, Vali Adimu expressed confidence in the financial and economic policies of the government of Pakistan. (International Monetary Fund)

ISLAMABAD (Shahbaz Rana) Despite the implementation of the IMF’s strict conditions by the government of Pakistan, there has been no change in the attitude of the international organization toward the loan and it is keeping new conditions, which the government of Pakistan is fed up with the international organization. They have requested the cooperation of America to settle the issues. Yesterday, Finance Minister Ishaq Dar made a virtual call to the US Deputy Finance Minister, Mr. Wally Adimu, to apprise him of the latest situation and requested help to convince the IMF. Sources in the Ministry of Finance say that there is no possibility of a staff-level agreement with the IMF this week as well. 3.82 per unit debit between the Government of Pakistan and the IMF on exchange rates, interest rates, external financing targets, and electricity bills.
There are disagreements over the issue of levying service charges. The finance ministry is hopeful that an agreement will be reached next week, if not this week. Sources in the Ministry of Finance say that such a situation has never been faced in the last 25 years of dealing with the IMF. In each round of negotiations, the international organization brings new demands. Negotiations on the 9th review with the IMF began a month ago. Not only Pakistan is suffering due to the delay in issuing the $1.1 billion installment, but Moody’s has also downgraded Pakistan’s credit rating from CCC. Apart from China, other regional countries are also supporting the IMF in matters with Pakistan. According to sources, the Ministry of Finance had set a target of 5 billion dollars for external financing, which the IMF has increased to 7 billion dollars. Pakistan has requested the IMF to reduce the current account deficit target by one billion dollars. A billion-dollar exchange rate target can be met by lowering the target. The IMF has set a current account deficit target of $8.2 billion for this year, though it is only $3.7 billion in the seven months of the current fiscal year. The government of Pakistan says that if the IMF loosens its stance, it could bring the current account deficit to one billion dollars as the government hopes to collect seven billion dollars by June and the official exchange rates by June. Reserves will increase to 10 billion dollars. The IMF is still not listening to Pakistan in terms of external financing, although it has been assured that Pakistan will get $2 billion from Saudi Arabia and $1 billion from the United Arab Emirates. The government of Pakistan hopes to get another 2 billion dollars from Saudi Arabia and the UAE for the sale of government assets. Pakistan has received 700 million dollars from China, 1 billion 30 million more will be received in three installments. Sources in the Pakistani government say that under pressure from the IMF, the rupee’s exchange rate has been left to market forces, resulting in a huge appreciation of the dollar against the rupee, even though it was only last month. The value of the dollar was up to 230 rupees. But the IMF still says the government is interfering with the dollar’s exchange rate. The international organization wants the exchange rate of the rupee to be equal to the gray market of the dollar, which is not true. According to the sources involved in the negotiations with the IMF, the international organization has tried to explain, but it does not understand.

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