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Ishaq Dar to visit Washington to attend IMF, WB meetings

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  • Dar-led team to attend annual meeting of Bretton Woods Institutions.
  • Dar may present fresh proposals before IMF, WB for dollar inflows.
  • Pakistan, IMF to discuss possibility of combining 10th, 11th reviews.

ISLAMABAD: Finance Minister Ishaq Dar will be leading a high-powered delegation to the US which will attend the upcoming annual spring meeting of the Bretton Woods Institutions (BWIs), known as the International Monetary Fund (IMF) and World Bank, from April 10 to 16.

The finance minister, along with an official delegation comprising the Finance and Economic Affairs Division secretaries and the State Bank of Pakistan (SBP) governor, might present fresh proposals before the IMF and World Bank for providing dollar inflows.

During the meetings, according to a The News report, Pakistan and the IMF would also discuss the possibility of combining the remaining 10th and 11th reviews under the $6.5 billion Extended Fund Facility (EFF) programme in case the pending 9th Review is completed.

The IMF programme, signed in 2019, is going to expire on June 30, 2023, and under the set guidelines, the programme cannot be extended beyond the deadline.

It is yet to be seen how the two sides would proceed with the completion of the bailout programme when the 10th Review has already got delayed.

The pending 9th Review was scheduled to be completed in December 2022 and the 10th Review should have been kick-started from February 2023. The 11th Review was scheduled to commence on May 3.

Now the delayed decision on the 9th Review would increase the cost of rectifying the situation.

There is no easy solution available to fix the ailing economy of Pakistan and the government is of the view that they have taken all the tough decisions for reviving the stalled IMF programme.

Now the Fund is seeking verifications from the bilateral friends of Pakistan, including Saudi Arabia, the UAE and Qatar, if they would provide additional assistance of $6 billion till the end of June 2023.

The SBP foreign exchange reserves stood at $4.2 billion, which is not even sufficient for meeting obligations on account of foreign debt servicing including principal amount and markup.

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Pakistan’s gold price increases by an additional Rs. 800 per tola.

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The price of yellow metal in the local market hit Rs247,300 on the first working day of the week, following a rise of Rs800 in a single day.

The cost of ten grams of 24-karat gold increased by Rs686 on Monday, making the current price Rs212,020.

In addition, the cost of 10 grams of 22-karat gold increased significantly, trading at Rs194,351.

These fluctuations are strongly correlated with shifts in the US dollar’s value, demonstrating the tight connection between gold prices and exchange rates. This emphasizes how local gold markets are impacted by variables related to the global economy.

The price of the precious metal dropped $16 on the international market on Monday, hitting $2,348 per ounce.

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A delegation from Pakistan travels to the US to bargain with the IMF for a new loan.

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The Pakistani delegation consists of the Governor of the State Bank of Pakistan, the Secretary of Finance, the Additional Secretary, and other individuals.

The Finance Minister was greeted at the airport by Pakistan’s Ambassador to the United States, Masood Khan, and Embassy staff.

The Finance Minister will meet with representatives of the World Bank and IMF while he is in the US.

The IMF and Pakistan are expected to negotiate next week, according to sources.

Sources claim that Islamabad will apply for a new credit package from the IMF.

The Finance Minister’s itinerary also includes meetings with members of think tanks and the world press.

Last month, Pakistan and the IMF came to a staff-level agreement over the third and final review of the $3 billion stand-by arrangement. Should the board of the global lender approve this deal, Pakistan will get approximately $1.1 billion.

Although a specific date has not been determined, the IMF board is anticipated to evaluate the case in late April, according to a spokeswoman.

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Pakistan’s petrol prices are anticipated to rise.

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The Oil and Gas Regulatory Authority (OGRA) will not disclose the anticipated increase in fuel prices until its work is finished, according to sources.

Prime Minister Shehbaz Sharif will receive the summary of the petrol price, and sources further stated that the new pricing will be revealed following his approval today.

Noteworthy to highlight is that Pakistan was previously ordered by the International Monetary Fund (IMF) to impose an 18% General Sales Tax (GST) on gasoline.

Details indicate that Pakistan was requested by the Monetary Fund to stop reducing sales tax on all goods, including gasoline.

To boost tax revenue, Pakistan’s recently elected government should impose a sales tax on petroleum items in addition to a Rs 60 charge.

High-speed diesel (HSD) was reduced by Rs3.32 per litre on March 31 but petrol prices increased by Rs9.66 per litre by the government.

In contrast to the reduction in the price of high-speed diesel (HSD) to Rs282.24 from Rs278.92, the price of gasoline jumped to Rs289.41 per litre.

The adjustments were brought about by a commensurate increase in the price of gasoline and a decline in the price of HSD on the global market, according to a statement released by the Finance Ministry.

According to the statement, the adjustment was made in accordance with government policy, which transfers pricing differences from the foreign market to the home market.

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