“Policy commitments made by the Pakistani authorities as part of the Seventh and Eighth review under their IMF-support programme continue to apply,” IMF representative in Islamabad Esther Pérez Ruiz told Reuters
By Staff Reporter
ISLAMABAD: The International Monetary Fund (IMF) said policy commitments made by Pakistan for the resumption of bailout package continue to apply.
“Policy commitments made by the Pakistani authorities as part of the Seventh and Eighth review under their IMF-support programme continue to apply,” IMF representative in Islamabad Esther Pérez Ruiz told Reuters on Monday.
She said policy discussions, including how to target support to those affected by the floods while maintaining macroeconomic stability, will commence in coming weeks after the damage assessment report becomes available.
The country was recently able to restart the IMF bailout package after agreeing to undertake difficult reforms.
The IMF representative made the comments a day after former finance minister Miftah Ismail termed the government’s decision to freeze fuel levy “reckless”.
Miftah had engaged in a Twitter spat with PTI leader and his predecessor Shaukat Tarin on Sunday where he had critcised the previous government for its “unforgivable” petroleum subsidies, but had also admitted that the PML-N-led government’s decision to lower petroleum products’ prices was “reckless”.
Pakistan has committed to increase the petroleum levy on petrol by Rs30 per liter till September 1, and on diesel by Rs15 per on September 1, 2022 and take it to Rs50 per liter in January 2023 on petrol and Rs50 per liter on by April 2023 diesel.
Miftah had prematurely increased it to Rs37.5 per liter despite the IMF had set the Rs35 per liter limit for petrol for October 1. Current Finance Minister Ishaq Dar, who took the baton from Miftah last month, has cut it to Rs32.5 per liter on petrol, which is not very low compared to the October 1 requirement.
The country’s newly appointed finance minister Ishaq Dar, meanwhile, said the rupee will strengthen to under 200 to the US dollar.
“The actual value of the Pakistani rupee is less than 200 against the dollar.”
The rupee is currently at around 227 to the US dollar, and the currency has been in turmoil, falling as much as 30 percent this year.
“The rupee’s real value is below 200 (to US$1), and, God willing, it will come below 200 (rupees),” Minister Ishaq Dar said in an interview with local television channel.
He added that the rupee would be strengthened though government “policies” as the current rate was inflated due to speculation.
Dar, who was sworn in last week as finance minister for his fourth stint in the role, has strongly favoured intervention in currency markets in the past.
Since Dar took over, the rupee has strengthened. According to central bank figures, Pakistan currently has just $8 billion in reserves, barely covering a month of imports, making market intervention through currency injections difficult.
One of the agreements was to implement a market-determined exchange rate and to stop government intervention in the central bank.
Dar also defended his decision to slash fuel prices days after taking over – reversing a policy of raising prices monthly through added levies to ensure enhanced revenues as agreed with the IMF.
Dar said imposing additional levies was not justified as the country struggled with catastrophic floods that have killed more than 1,600 people and inflicted at least $30 billion in damages.
“I have been dealing with the IMF for the last 25 years; I will deal with it,” he said, referring to any potential reservations by the lender.
“I know how to deal with the IMF and no one has to worry about anything regarding it anymore,” said Dar said while responding to Miftah’s comment during a show on the private news channel.
I have to handle the IMF matters, so from now on, neither Miftah nor anybody else has to worry about anything.” (Content source Reuters/Geo TV)
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