Ajit Karn
Islamabad: In response to the delay in the staff-level deal with the International Monetary Fund (IMF), Pakistan has decided to ask the United States for assistance in reviving its delayed loan programme, according to report, which cited sources.
As the majority of the fund’s requirements have been met, the incumbent government has decided to seek assistance from the United States, according to Finance Ministry sources. “There is no reason to further delay the staff-level deal,” According to report.
According to additional reports, Finance Minister Ishaq Dar will meet with the US envoy this week. It has been learned that a staff-level deal between Pakistan and the IMF is possible this week.
Monday is also scheduled for virtual discussions with the International Monetary Fund, according to ARY news.
According to additional sources, State Bank of Pakistan and IMF officials held discussions on Thursday. They discussed the Memorandum of Economic and Financial Policies’ finalised provisions.
Pakistan was ordered by the International Monetary Fund (IMF) to meet certain conditions before a staff-level deal could be reached to revive the USD 7 billion Extended Fund Facility (EFF), which had been suspended for months.
The State Bank of Pakistan (SBP) increased the monetary policy rate by 300 basis points to 20% as one of the International Monetary Fund’s prerequisites.
“In the wake of recent external and fiscal adjustments, this decision reflects a deterioration in inflation forecasts and expectations. MPC believes that this outlook requires a robust policy response to anchor inflation expectations within the medium-term target range of 5% to 7% “stated the statement.
“MPC noted that a reduction in CAD is crucial, but requires concerted efforts to enhance the external environment. It emphasised that any significant fiscal slippage would undermine the effectiveness of monetary policy in attaining the objective of price stability “the SBP included.
Pakistan accepted an additional requirement of the International Monetary Fund (IMF) for the revival of the USD 7 billion Extended Fund Facility (EFF), as the government consented to raise electricity rates for K-Electric (KE) customers and the agricultural community.
Documents indicate that the implementation of a uniform tariff will increase electricity rates by an average of 3.21 Pakistani rupees per unit.
Residential consumers who consume over 100 units will be charged Rs1.49 per unit, while those who consume over 700 units will be charged Rs3.21 per unit. Meanwhile, transient residential customers and industrialists will see a 4.45 PKR per unit increase in their electricity rates.
The government also resolved to increase the quarterly electricity tariffs for consumers by PKR 1.55. In addition, it has been chosen to increase the quarterly consumer rate from July 2022 to September 2022.
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To comply with International Monetary Fund (IMF) requirements, the federal government increased the electricity rate for agricultural consumers and withdrew the Kissan package subsidy.
The Kissan Package subsidy of PKR 3.60 per unit for agricultural consumers has been eliminated. Power tariffs for agricultural consumers are now PKR 16.60 per unit.
