Pakistan is not going to default, claims Finance Minister Ishaq Dar as he goes on to inform about the possibility of signing Staff Level Agreement with the IMF by next week.In a tweet, Dar said negotiations with the International Monetary Fund (IMF) related to the completion of the ninth review of a $7 billion loan programme were near conclusion.
Pakistan has been suffering acute economic crisis with people of the cash-strapped country struggling to make ends meet.The country reported highest-ever inflation in the month of February. Pakistan’s inflation soared to 31.55 per cent, compared to 27.6 per cent in January this year.nflation in February 2022 was at 12.2 per cent.
In his tweet, Dar claimed that State Bank of Pakistan’s (SBP) forex reserves have been increasing and are almost $1 billion higher than they were four weeks ago “despite making all external due payments on time.”He further claimed that foreign commercial banks have started extending facilities in Pakistan. “All economic indicators are slowly moving in the right direction,” the Pakistan foreign minister said.
Anti-Pakistan elements are spreading malicious rumours that Pakistan may default. This is not only completely false but also belie the facts,” Dar claimed.The remarks by the finance minister comes at a time when the Pakistani rupee depreciated sharply by Rs 18.74 against the dollar in the interbank market On Thursday.
The statement by Dar coincides with the State Bank of Pakistan (SBP) announcement on Thursday of increasing loan interest by 300 basis points (bps) to 20 per cent – highest level since October 1996.
The bank citied rising inflation as the reason for increasing the interest rate. In a statement, the country’s central bank saidIn a statement released today, the central bank said that the decisions reflected the “deterioration in inflation outlook” and its expectation amid recent external and fiscal adjustments.
The agreement with the global lender on the completion of the ninth review of a $7bn loan programme would lead to a disbursement of $1.2 billion and also unlock inflows from friendly countries.
Don’t Miss: Bending over backwards: Desperate for IMF bailout, Pakistan saddles impoverished citizens with steep loan interest hikeThe prerequisites by the IMF are aimed at ensuring Pakistan shrinks its fiscal deficit ahead of its annual budget around June.
Pakistan has already taken several other prior actions, including hikes in fuel and energy tariffs, withdrawal of subsidies in export and power sectors, and generating more revenues through new taxation in a supplementary budget.