Last Updated on: 3rd July 2023, 10:09 pm
Pakistani Rupee Tumbles As IMF Says Mission Will Visit Next Week
The International Monetary Fund (IMF) mission will visit Pakistan on 31st January to resume talks on the stalled ninth review of the US$7 billion Enhanced Financing Facility (EFF).
IMF Representative in Pakistan Esther Pérez Ruiz told media spokesperson that at the request of the authorities, a personal mission from the Fund would visit Islamabad from January 31 to February 9 to continue talks under the ninth review of the EFF.
“The mission will focus on actions to restore internal and external sustainability, including strengthening fiscal positions through quality and sustainable actions while supporting vulnerable and flood-affected people; restoring the viability of the electricity sector and reverse the continued accumulation of circular debt; and restoring the proper functioning of the foreign exchange market, allowing the exchange rate to eliminate the shortage of foreign exchange,” the statement added.
He further said that further efforts and policy reforms are essential to reduce the current high level of uncertainty over the prospects, build Pakistan’s resilience, and secure financial support from official partners and markets, which are vital to Pakistan’s future sustainable development.
IMF’s Insistence On Earlier Action
On Monday, News media reported that the IMF had rejected Pakistan’s request to send its team to complete the ninth review and asked the Ministry of Finance to take all previous steps first.
Following the IMF’s clear message, Pakistani officials in virtual calls throughout the week assured the IMF that it would complete all previous measures. The officials also shared a draft mini-budget worth Rs 200-300 billion with the IMF.
The Pakistani rupee fell to an all-time high of 255.43 rupees against the US dollar in the interbank market today, down 24.54 rupees. A clear sign that the government has finally accepted the IMF’s requirement to introduce a market-based exchange rate.
Reason For The Delay?
Pakistan has been reluctant to accept earlier measures called for by the IMF, which delayed the ninth review talks by months. Former Treasury Secretary Miftah Ismail flatly blamed Treasury Secretary Ishaq Dar for his anti-International Monetary Fund (IMF) approach, saying the country suffered a huge financial loss as a result.
Pakistan’s dwindling reserves, which currently stand at just $3.7 billion, along with a reluctance by friendly countries to provide financial assistance without resuming the IMF program, eventually forced it to agree to the prior measures demanded by the global lender.
Also Read: IMF Has Signaled its Willingness To Ease Loan Conditions in Pakistan, Says Miftah Ismail