Connect with us

Business

IMF agreement to be inked next week: Rana Sanaullah

Published

on

  • “Govt has fulfilled all requirements of IMF,” the interior minister says.
  • He adds after agreement relief could be passed on to the public.
  • Pakistan and IMF are engaged in tough talks since late January.

ISLAMABAD: With all eyes on the International Monetary Fund (IMF) for their final nod, Interior Minister Rana Sanaullah has said the agreement with the lender would be inked formally during next week, Radio Pakistan reported on Tuesday.

The two sides are engaged in tough talks to reach a consensus on multiple conditions since late January before signing the deal which also includes external financing from friendly countries.

Sanaullah, addressing a public gathering in Faisalabad, said that the government has fulfilled its all requirements and after the agreement relief could be passed on to the public.

A day earlier, Finance Minister Ishaq Dar told Geo News that Pakistan has “fulfilled all the conditions” of the IMF and hoped that the Fund will soon sign the staff-level agreement, paving the way for the release of the $1.1 billion tranche.

Dar said both Saudi Arabia and the United Arab Emirates (UAE) have informed the IMF about their commitments to provide $3 billion to Pakistan.

Riyadh will provide $2 billion while Abu Dhabi has promised $1 billion to Pakistan, Dar said, adding that the Washington-based lender has also been informed in this regard.

The finance minister said all the conditions for the staff-level agreement between Pakistan and IMF have been fulfilled.

“Pakistan is hopeful that IMF will soon sign the SLA and get it approved by its Executive Board,” Dar added.

The country’s foreign exchange reserves have fallen to cover barely a month of imports after the IMF funding stalled in November, hit by snags over fiscal policy adjustments after officials of the lender visited Islamabad in February for talks.

They formed part of a ninth review exercise on a bailout package of $6.5 billion agreed upon in 2019 whose resumption is critical for Pakistan to avoid risking default on external payment obligations.

Pakistan had to complete actions demanded by the IMF, such as reversing subsidies in its power, export and farming sectors, hikes in the prices of energy and fuel, and a permanent power surcharge, among other measures.

These steps included jacking up its key policy rate to an all-time high of 21%, a market-based exchange rate, arranging for external financing, and raising more than Rs170 billion ($613 million) in new taxes.

The fiscal adjustments have already fuelled Pakistan’s highest inflation ever, which climbed in March to more than 35% on the year.

The IMF programme will disburse another tranche of $1.4 billion to Pakistan before it concludes in June.

Funds from the lender will also unlock other bilateral and multilateral financings for the cash-strapped country.

Neighbouring China has rolled over $2 billion and refinanced another $1.3 billion in recent weeks.

Business

The cost of a liter of petroleum increased by much to Rs 8.14.

Published

on

By

Prices for gasoline and high-speed diesel were raised by the government on Monday by Rs4.53 and Rs8.14, respectively, for the upcoming two weeks.

In relation to this, the ministry of finance released a notice.

Diesel now costs Rs 290.38 per litre, while petrol is now priced at Rs 293.94 per liter following the most recent increase.

Additionally, light diesel cost Rs6.54 more per litre, to Rs174.34. A 6.69% increase in price to Rs193.8 per liter was made for kerosene oil.

The impact of the developing Middle East situation and the expanding global market are the main factors contributing to the transformation.

Before the most recent spike, the price of gasoline and HSD had risen by almost $4 and $4.50 per barrel, respectively, on the global market during the previous two weeks.

Continue Reading

Business

Finance Minister Aurangzeb claims that Pakistan and the IMF are talking about a new multibillion-dollar initiative.

Published

on

By

The South Asian country is drawing to a close a $3 billion loan program with the International Monetary Fund that lasted nine months and was intended to address a balance-of-payments crisis that had put it in danger of defaulting last summer.

Pakistan has started negotiations for a new multi-year IMF loan program for “billions” of dollars, Finance Minister Muhammad Aurangzeb said in a Washington interview, with the final $1.1 billion tranche of that arrangement likely to be approved later this month.

Aurangzeb, a former banker who started his job last month, stated, “The market confidence, the market sentiment is in much, much better shape this fiscal year.”

“We really started talking with the Fund this week to get into a larger and longer program for that reason,” he continued.

A representative for the IMF informed AFP that the organization is “currently focused on the completion of the current Stand-by Agreement program,” which is a nine-month program that is expected to be finished soon.

The spokesperson went on, “The Fund staff is prepared to start initial talks on a successor program as the new government has expressed interest in a new program.”

“Third-year curriculum”
Aurangzeb’s journey to Washington will also include attendance at the IMF and World Bank’s spring meetings, which begin in earnest on Tuesday and have two distinct goals: supporting the world’s most indebted countries and aiding governments in the fight against climate change.

The IMF’s revised World Economic Outlook will be released to coincide with the start of the meetings, which bring together academics, representatives from the private sector, civil society, finance and development ministries, and central bankers to debate the state of the global economy.

Allegations of election tampering plagued Pakistan’s February 2019 elections, resulting in the imprisonment and disqualification of opposition leader Imran Khan and the persecution of his Pakistan Tehreek-e-Insaf (PTI) party.

The unstable alliance that surfaced, headed by Shehbaz Sharif, is currently charged with bringing about an economic recovery through the imposition of several controversial austerity measures.

Aurangzeb stated, “I do believe that we will be requesting for a three year program.” “Because in my opinion, that is what we need to help carry out the structural reform agenda.”

He went on, “I do think we’ll start getting into the contours of that discussion by the time we get to the second or third week of May.”

Keeping the US-China rivalry in check
Pakistan is in a difficult situation as the two nations have started an expensive trade war because of its strong economic ties to both China and the United States.

When asked how the Sharif government intends to handle its commercial relationships with the two largest economies in the world, Aurangzeb responded, “From our perspective it has to be a and-and discussion.”

“The United States is our biggest trading partner, and it has consistently provided us with support and assistance with our investments,” he stated. Therefore, that relationship will always be extremely important to Pakistan.

He was alluding to the nearly 1,860-mile-long China-Pakistan Economic Corridor, which was built to offer China access to the Arabian Sea, when he added, “On the other side, a lot of investment, especially in infrastructure, came through CPEC.”

According to Aurangzeb, Pakistan has a “very good opportunity” to participate in the trade war on par with nations like Vietnam, whose exports to the US have increased significantly as a result of tariffs placed on some Chinese items.

He stated, “We already have a few examples of that working.” “However, we must truly scale it up.”

reform initiative

Pakistan is currently engaged in a privatization campaign to sell off its underperforming state-owned businesses (SOEs) as part of the structural reform package agreed upon by the previous government.

The nation’s flag carrier, Pakistan International Airlines, is the first SOE on the list.

In regards to potential bidder interest, Aurangzeb stated, “we will find out in the next month or so.”

He said, “Our goal is to proceed with that privatization and see it through to completion by the end of June.”

Other businesses may soon follow if the government’s privatization of the PIA proceeds smoothly.

He declared, “We’re building a whole pipeline,” and added, “We want to really accelerate that over the next couple of years.”

Continue Reading

Business

Owners of oil tankers stop the provision of fuel in favour of their demands.

Published

on

By

The Association declared on Monday that, in response to what it deemed to be an “unfair” measurement by the relevant authorities, gasoline delivery will stay suspended as of Tuesday.

According to the Oil Tankers Owners’ Association, they attempted to resolve their complaints with Deputy Commissioner Islamabad and Pakistan State Oil (PSO), but to no effect.

The Oil Tankers Owners Association has yelled slogans in support of their demand while parking their containers in the PSO depot.

The owners of oil tankers declared that they would not end their strike until their demands were met, accusing the administration of being to blame for the fuel crisis.

The association requested that the authorities abide by their requests, which included filling under a metered system. It further stated that the deal reached on February 20 had been broken by the authorities.

Continue Reading

Trending