Ishaq Dar, the finance minister for Pakistan, stated that the Shehbaz Sharif-led state government had accepted the terms set forth by the Washington, DC-based International Monetary Fund despite a financial crunch unlike anything seen before and the currency crisis at its height.
Dar stated that when the $7 billion credit package examination was finished, the government got the Memorandum of Economic and Financial Policy (MEFP). In addition, Pakistan has a history of failing to meet IMF requirements, according to the Islam Khabar report. He was adamant that the administration would review the MEFP draught over the weekend and arrange a virtual conference with IMF representatives. The Pakistani tabloid Dawn cited him as stating, “We will thoroughly review the MEFP over the weekend and convene a virtual meeting with. It will undoubtedly require several days.
Dar was addressing during a press conference following the release of a statement about the visit to Pakistan by an IMF delegation led by Nathan Porter. The MEFP is a document that outlines the terms, procedures, and policy directives upon which the parties declare staff-level agreement. Dar added during the news conference the “difficult but necessary” reforms advised by the IMF in some sectors are in Pakistan’s best interests. Also, he criticised the previous government, which Imran Khan led, for “economic ruin and misgovernance.”
Dar claimed that due to the PTI government’s conduct, the IMF did not trust the Shehbaz Sharif administration. He continued by saying that the Imran Khan administration not only did not put the agreement with the IMF into effect but also went back on it once a resolution of no confidence was launched against the regime. According to the finance minister, Pakistan would disburse $1.2 billion in Special Drawing Rights (SDRs), global reserve assets created by the IMF in 1969 and distributed to members to supplement existing government reserves. Among the demands made by the IMF are the abolition of power subsidies, revaluation of gas tariffs to reflect market rates, implementing of a market-determined exchange rate, and removing restrictions on opening letters of credit.
Pakistan would get the urgent economic assistance it needs if an agreement between Pakistan and the IMF could be struck. Additionally, suppose the PDM administration doesn’t comply with any of the IMF’s requirements. In that case, potential funding from allies like Saudi Arabia, the United Arab Emirates, China, and other institutional lenders will also be withdrawn.
The Pakistani government has proposed a 170 billion rupee ($643 million) finance bill to help the impoverished nation obtain funding from the International Monetary Fund (IMF) to avoid default. After lifting an exchange ceiling that the IMF had fought against to save the bailout, the Pakistani rupee has lost more than 15% of its value against the US dollar. The Pakistani central bank has historically supported the Pakistani rupee for protracted periods of time by using its foreign exchange reserves. According to official figures, the country’s overall import bill between July 2021 and June 2022 exceeded $80 billion, while its exports amounted to $31 billion.
