What has Pakistan agreed with the IMF?

Pakistan has agreed with the International Monetary Fund on the conditions to release $1

1 billion in critical funding, Finance Minister Ishaq Dar said on Friday, adding that the payout was delayed due to "routine procedures"

Below are the key points Pakistani authorities say they have already reached agreement on with the IMF: The government will implement fiscal measures, including taxation, to raise Rs170 billion worth of revenue

The government's existing commitments to increase petroleum levies will be completed

Diesel levies will be raised twice by 5 rupees per litre each time on March 1 and April 1

Energy reforms suggested by the IMF will be discussed and approved by Pakistan's cabinet

This would include Pakistan completely slashing its circular debt - a form of public debt that builds up in the power sector due to subsidies and unpaid bills

Eliminating circular debt entirely was not an immediate requirement

In the meantime, Pakistan would not add any circular debt related to gas

Macroeconomic indicators Pakistan's foreign exchange reserves have fallen to the lowest level in 10 years and cover only three weeks' worth of imports

In the week ending Feb 3, the State Bank of Pakistan foreign currency reserves shrank to $2

917 billion, down $170 million from the previous week

Inflation Inflation has averaged a record 25

4% in the seven months of the current fiscal year starting July versus 10

3% in the same period of the previous year

The consumer price index rose 27

5% year-on-year in January, its highest in nearly half a century

Last month, the central bank raised its key interest rate by 100 basis points to 17% in a bid to rein in persistently high inflation, and said achieving price stability was key to attaining sustainable economic growth in the future

The bank has raised the key rate by a total 725 bps since January 2022

Current account deficit Pakistan's current account deficit shrank to around $400 million in December 2022 from $1

9 billion a year earlier, as the government slashed imports in a bid to avert an external payments crisis

The rupee The rupee reached a record low of 276

58 to the dollar in the interbank market on Feb


The rupee has dropped more than 35% in the last 12 months

Date:13-Feb-2023 Reference:View Original Link