Pakistan on the verge of bankruptcy and the IMF reach an agreement
Pakistan, which is among the countries on the verge of bankruptcy, agreed with the International Monetary Fund (IMF) a stand-by loan of 3,000 million dollars.
According to the British news agency Reuters, the agreement between the IMF and Pakistan, which is expected to be signed today, must be approved by the Executive Board of the IMF in July.
Negotiations between Pakistan and the IMF, which is in a balance of payments crisis and running out of reserves, have been going on for a long time.
ANNOUNCEMENT MINISTER OF FINANCE
Pakistani Finance Minister Ishak Dar shared the “Thank God” message on Twitter today after the IMF deal.
The credit release process will take 9 months.
After the deal, the value of Pakistan’s foreign currency bonds increased.
Pakistan, which signed a $6.5 billion loan agreement with the IMF in 2019, was awaiting the release of the remaining $2.5 billion tranche of this loan. Today’s agreement was signed based on the terms of the agreement in 2019.
HEAVY IMF CONDITIONS
For the deal, the IMF called for the removal of subsidies in Pakistan’s electricity sector and exports, an increase in energy and fuel prices, an increase in the policy rate to 22 percent, and the liberalization of exchange rates.
The IMF also requested a tax increase of $1.4 billion, and the Pakistani government accordingly.
It was for a tax increase.
It is said that it will be difficult to keep the promises made to the IMF in Pakistan, where consumer inflation peaked at 38 percent in May.
Pakistan currently owes $5.4 billion to the IMF.
Source: Sozcu
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
