IMF demands five major prior actions to resume loan facility: Pakistan finance advisor Shaukat Tarin
Nov 17, 2021
Islamabad [Pakistan], November 17 : Pakistani Finance Adviser Shaukat Tarin has said that IMF gave Pakistan a list of five major prior actions for the resumption of its six billion dollars Extended Fund Facility (EFF), local media reported.
Speaking to reporters on Tuesday, Shaukat Tarin said the five prior actions going to be implemented by Pakistan include submission of abolishing of Tax Exemption bill 2021, State Bank of Pakistan (SBP) Amendment bill 2021, and already hiked electricity tariff besides two other minor actions, Geo Tv reported.
He said that the IMF did not agree with the promulgation of the ordinance for withdrawal of tax exemptions but the government would have to submit a tax exemption bill in order to fulfil the IMF's conditions.
Citing top official sources, Goe Tv reported that the increase in monetary policy ranging from 75 to 100 basis points, adjusting upward from 7.25 to 8 or 8.25 per cent and adjustment in the exchange rate, will also be part of prior actions for completion of the outstanding Sixth Review under the IMF programme. Now the SBP has convened its Monetary Policy Committee (MPC) on Friday (November 19) instead of November 26, 2021, for considering the monetary stance.
He said that Pakistan's exports were largely dependent upon USA and EU and in the aftermath of the surfacing of GSP Plus related issues, there was a need to diversify our export-related destinations.
Last week, the State Bank of Pakistan (SBP) had raised Cash Reserve Requirement (CRR) by one percentage point for scheduled banks for the first time in 13 years in a bid to curb rising inflation in the country.
Moreover, the rupee plunged to a record low of 176 against the dollar in intra-day trading before closing at 175.73 this week. The rupee is under pressure due to increased dollar demand from importers to make payments. Besides this, traders and investors are also worried about the future of the IMF's USD 6 billion worth loan facility.
