IMF expresses reservation over Pakistan's draft agreement
Last updated on: 10 May,2019 11:34 pm
Pakistan will take $7 billion to $8 billion loan from IMF.
ISLAMABAD (Dunya News) – International Monetary Fund (IMF) on Friday has expressed reservation over the draft agreement of loan program with Pakistan.
According to details, the IMF delegation arrived at the office of finance ministry and informed about the concerns raised by the headquarters.
The Pakistani side has assured the team to address its reservations. However, sources told that the deal may face delay if the incumbent government fails to satisfy the IMF.
Sources told that electricity prices will start increasing from July 1 while country would withdraw tax exemptions amounting to Rs700 billion within two years. Pakistan will take $7 billion to $8 billion loan from IMF under a three year program for which, an agreement is expected to be signed today.
As per IMF condition, the government will have to reduce subsidies and take Rs340 billion from consumers in the energy sector only. The prices of gas will be raised in the second phase.
Those government departments that are immersed in deficit will be privatized while State Bank of Pakistan would be able to regulate exchange rates independently. The rate of US dollar would be set without any pressure from the government. This implies that the government is expected to allow a significant rupee depreciation and key interest rate hike in 2019. Financial discipline will be maintained whereas non-developmental expenses will also be limitized.
As per sources reported, the talks between Pakistan and IMF have been on a deadlock as no results have been achieved for past 12 days.
According to the sources, few problems raised at the last moment of the deal where both parties failed to decide on a mutual agreement.
It was stated before that the announcement of agreement with IMF can be expected at any moment as Pakistan has agreed to all IMF’s conditions.
Finance Minister Spokesperson expressed that the talks with IMF will continue for two more days.