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Miftah Ismail rules out imposition of financial emergency in Pakistan

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  • Miftah Ismail says no possibility of financial emergency in country.
  • He says after two hikes in petrol price, country out of financial crisis.
  • PM Shehbaz Sharif to announce austerity measures as well, he adds.

ISLAMABAD: Finance Minister Miftah Ismail Monday ruled out the possibility of a financial emergency in the country after the government took steps to rectify the ongoing economic turmoil.

In a tweet, Ismail said the country was not facing a financial emergency as the price of petrol had been increased twice — and hiked up to Rs209.86, while there has also been a massive increase in other petroleum products.

The finance minister, without specifying a date, added that Prime Minister Shehbaz Sharif would at some point announce austerity measures to save government expenditures.

In a bid to bring economic stability and revive the stalled multi-billion dollars International Monetary Fund (IMF) programme, the government had increased the price of petrol by a whopping Rs60 per litre.

Moreover, the National Electric Power Regulatory Authority (NEPRA) last week raised the basic power tariff by Rs7.9078/kWh for the next fiscal year 2022-23 — increasing the burden of inflation on the people.

The Oil and Gas Regulatory Authority (OGRA) had also last Friday approved an increase in gas prices — a hike of 45% was approved for the Sui Northern Gas Pipelines Limited (SNGPL) while 44% for the Sui Southern Gas Company (SSGC).

The finance minister had also assured last month that the government would reach a staff-level agreement with the international money lender by June, without specifying the exact date.

Separately, the State Bank of Pakistan (SBP) said the government and the central bank were taking all necessary measures to ensure macroeconomic stability in the country.

The recent difficult decisions taken by the government — including the reduction of subsidies on petroleum products — are expected to pave the way to reaching an agreement with the IMF and release of the tranche and financial assistance from other multilateral agencies and friendly countries.

“We are confident that these measures will relieve the temporary stress being faced due to elevated global commodity prices and geopolitical tensions, and eliminate uncertainty in the economy,” the central bank said.

Freezing foreign current accounts?

In another tweet, the finance minister also said there was “absolutely no plan” to freeze foreign currency accounts, Roshan Digital Accounts, or take over people’s private lockers.

“We have never even contemplated these steps. Nor will we ever do it. Speculation on social media about this is wrong and coming from biased quarters,” he said.

Prior to the finance minister’s clarification, the SBP, in a statement, had rebutted rumours of imposing restrictions on foreign currency accounts, Roshan Digital Accounts, and safety deposit lockers.

In a statement, the central bank assured all account holders in Pakistan that their accounts and lockers are completely safe and that there is no proposal under consideration to put any restriction on them.

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The gold price in Pakistan today

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According to the All Sindh Sarafa Jewellers Association, the price of 10 grammes of 24 karat gold increased by Rs772 to Rs184,928 from Rs184,156, while the price of 10 grammes of 22 carat gold increased to Rs169,517 from Rs168,810.

These oscillations are strongly correlated with shifts in the US dollar’s value, demonstrating the complex interplay between gold prices and exchange rates.

This emphasises how local gold prices are impacted by events related to the global economy.

On the other hand, the cost of 24-karat silver was constant at Rs 2,570. Globally, too, the price of gold increased somewhat by $9 to $2,057 per ounce.

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Pakistan receives a $2 billion loan from China, according to the finance minister

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The $2 billion loan was one year ahead of schedule and became due in March. According to reports, Beijing had informed Islamabad of the decision.

The International Monetary Fund granted Pakistan’s cash-strapped economy a $3 billion standby arrangement last summer, but the country is still battling to recover from the financial crisis.

According to ratings firm Fitch, one of the top concerns confronting the next administration would be obtaining funding from bilateral and multilateral partners due to Pakistan’s precarious foreign situation, as was stated last week.

This event occurs one month after Anwaar-ul-Haq Kakar, the acting prime minister, asked for a $2 billion loan to be rolled over for a year in a letter to his Chinese counterpart.

In his letter, Kakar also expressed gratitude for China’s efforts to lessen Pakistan’s load

of foreign payments.

It is to be noted that Pakistan acquired safe deposits of $4 billion from China to address the balance of payments issue.

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“Ready to work with Pakistan’s new government,” the IMF said.

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In response to the former premier’s request, IMF Director of Communications Julie Kozak stated, “I’m not going to comment on ongoing political developments,” during a news conference.

She continued by saying that they “look forward to working on policies to ensure macroeconomic stability and prosperity for all of Pakistan’s citizens with the new government.”

In addition to stating that the plan is “supporting the authority’s efforts to stabilise the economy and to, of course, with a strong focus on protecting the most vulnerable,” Kozack said the lender increased the total disbursements under the Standby Arrangement (SBA) to $1.9 billion.

This has been accomplished by closely adhering to budgetary constraints and safeguarding the social safety net. In order to keep foreign exchange reserves growing and rein in inflation, a strict monetary policy stance has been maintained, the speaker stated.

The PTI founding chairman decided to write a letter to the international lender, asking it to demand an audit of the election held on February 8 before it proceeds with discussions with Islamabad for a new loan programme. This move prompted the IMF to release its statement.

In response to the former premier’s request, IMF Director of Communications Julie Kozak stated, “I’m not going to comment on ongoing political developments,” during a news conference.

She continued by saying that they “look forward to working on policies to ensure macroeconomic stability and prosperity for all of Pakistan’s citizens with the new government.”

In addition to stating that the plan is “supporting the authority’s efforts to stabilise the economy and to, of course, with a strong focus on protecting the most vulnerable,” Kozack said the lender increased the total disbursements under the Standby Arrangement (SBA) to $1.9 billion.

This has been accomplished by closely adhering to budgetary constraints and safeguarding the social safety net. In order to keep foreign exchange reserves growing and rein in inflation, a strict monetary policy stance has been maintained, the speaker stated.

The PTI founding chairman decided to write a letter to the international lender, asking it to demand an audit of the election held on February 8 before it proceeds with discussions with Islamabad for a new loan programme. This move prompted the IMF to release its statement.

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