The Chief of Army Staff, General Qamar Javed Bajwa, has requested assistance from Washington in achieving an early transfer of funds from the International Monetary Fund in order to help stabilize Pakistan's shrinking economy. Deputy Secretary of State Wendy Sherman, according to security sources, spoke with the army chief earlier this week. It is stated that the army chief made a plea to the White House and Treasury Department to get the IMF to immediately supply the almost $1.2 billion that the country is slated to receive under a reopened loan program. "Staff-level approval" for the loan was granted by the International Monetary Fund (IMF) on July 13. IMF Executive Board clearance is required before the transaction can be completed as part of Pakistan's $6 billion Extended Fund Facility. The International Monetary Fund (IMF) will be on vacation for the next three weeks, and its board will not meet until late August at the earliest. According to an IMF official wh...
The coalition government's "priority" was to keep Pakistan from going into debt.
Finance Minister Miftah Ismail said Tuesday that saving Pakistan from default was the coalition government's "priority" after the rupee hit an all-time low against the dollar and equities fell during the day's trading.
The Pakistani rupee touched a record low of 224 against the dollar in afternoon interbank trade before finishing at 221.99 — the largest day-on-day decline since June 26, 2019 — while the benchmark KSE-100 index finished at 40,389.07 points, a 20-month high.
According to analysts, the market has suffered as a result of the political instability caused by the Punjab by-elections, the International Monetary Fund's (IMF) delay, and the country's dwindling FX reserves.
He went on to say that the rupee was always decreasing owing to political insecurity, gambling, and speculation. At the same time, he stressed that the threat of default did not lurk over Pakistan.
The finance minister applauded the coalition government's harsh actions — boosting petroleum product prices, as well as power and gas tariffs, among other fiscal measures — for averting default, which also cleared the way for the critical staff-level agreement with the IMF.
To obtain the IMF loan, Prime Minister Shahbaz Sharif implemented three fuel price rises totaling 50 percent and hiked the cost of electricity, thus ending Khan's subsidies.
However, after the IMF agreement, the government has reduced the price of petrol by Rs18.50 per liter and diesel by Rs40.50 per liter.
Miftah stated that if the government gains budgetary freedom, the price of gasoline would be reduced even lower.
Moving on, the finance minister emphasized that the government's goal was to overcome and minimize the current account deficit, while also growing exports to alleviate pressure on the economy.
He stated that if the current administration is re-elected, it will be a good omen for Pakistan because it will provide stability.
Miftah went on to say that, despite the uncertainty, the economy's roots have "strengthened" during the previous four months.
The finance minister also stated that taking unpopular steps was critical for the government, but it also resulted in political defeats, as the PML-N just lost Punjab to the PTI in by-elections.
"But if necessary, we will make more difficult decisions," he warned.
Miftah stated that the IMF money will be received shortly, and that friendly countries would thereafter offer assistance to Pakistan.
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