Pakistan to complete IMF programme, delegation to reach soon: Shehbaz

Prime Minister Shehbaz Sharif on Saturday again expressed his government’s resolve to complete the terms of the International Monetary Fund (IMF) programme, as he shared the details of telephonic a conversation with the managing director of the world’s top lender.

 “In a phone call with Managing Director [Kristalina Georgieva] of the IMF yesterday, I told her about the government’s resolve to complete the terms of IMF’s program,” Shehbaz said.

The prime minister also talked about explaining Pakistan’s economic difficulties especially after the devastating floods and said an IMF delegation visit Pakistan soon.

It is for the second time in two days that the prime minister has talked about the IMF programme and progress on that.

Pakistan entered a $6 billion IMF programme in 2019, which was increased to $7 billion last year. The programme’s ninth review, which would release $1.18 billion, is currently pending. It had earlier been put off for two months due to the PML-N-led government’s unwillingness to accept certain conditions.

On Friday, Shehbaz had said that an IMF team led by its head would arrive in Pakistan within two or three days after which the next tranche could be released – a good sign for the cash-starved country gripped by political and economic uncertainty with the delay in the deal’s execution being the biggest reason behind all kinds of speculations about the possible default.

Shehbaz said the government made it clear to the IMF that they could not further burden the masses and won’t impose new taxes on them – an obvious reference to the demand of increasing power tariff.

The government would tax the rich, he added as his government is going for windfall tax on banks for their foreign reserve earnings with a rate ranging between 50 to 70 percent.

The suggestion first came after an inquiry conducted by the State Bank of Pakistan found several banks involved in currency manipulation which hiked the dollar exchange rate.

In latest media reports, it has emerged that commercial banks are refusing to issue letters of credit (LCs) for edible oil imports at the official exchange rate despite the exclusion of the sector from the condition of prior permission from the central bank.

The importers and local oil/ ghee manufacturers have been informed unofficially that their LCs cannot be opened at the interbank exchange rates. However, the commercial banks are very much willing to do business if they open credit letters at Rs250 and above the exchange rate against a dollar.

Shehbaz, who was addressing the inauguration ceremony of Hazara Electricity Supply Company in Islamabad, said he received a phone call from Georgieva who informed him that the Chinese premier had told her that Pakistan was a brotherly country and the financial institution must help the nation.

He shared this as an example while describing how Imran had damaged relations with China which is still standing by Pakistan.

The prime minister had, however, noted that his country was constrained by the conditions accepted by the PTI setup under the IMF deal.

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