ISLAMABAD: The Pakistani rupee has maintained its fall against the US dollar as the country resumes talks with International Monetary Fund ,International Monetary Fund) to revive the stalled multi-billion dollar loan program in Doha.
In talks with the IMF, the delegation of Pakistan, which includes representatives of State Bank Of Pakistan (SBP), Federal Board of Revenue (FBR) and the Ministry of Energy are headed by Finance Minister Mifta Ismail. IMF has set tough conditions for this Pakistan For a bailout that seems to have a political price for a beleaguered coalition government. IMF wants Pakistan to withdraw former PM Imran Khan’s subsidy on fuel and electricity KHAN It was announced earlier this year. When former opposition parties ran a no-confidence vote against Khan, he had announced a steep cut in the price of petrol and diesel by Rs 10 per liter and electricity by Rs 5 per unit as well as announcements related to tax cuts. . Interest free loans to students, small farmers and unemployed youth.
Khan’s decisions won him popular support, but it has badly affected three markets – debt, stocks and foreign exchange – leading to a serious financial crisis in the country.
Recently, the Pakistani Rupee touched a crucial level of 200 in the open market against the US Dollar. Rupee has been in a declining trend since last 13 months. It has lost 30.28% (or Rs 46.12) so far as compared to a record high of Rs 152.27 in May 2021.
In the interbank market, however, the local currency is losing its value and with the latest fall of Rs 2.1, it fell to another historic low of Rs 198 against the greenback, despite dubious intervention by the central bank.
Investors are worried as there is speculation in the market that the IMF may not agree to restart the loan program if the government fails to implement its demands.
Pakistan signed a $6 billion bailout package with the IMF in 2019, which was never fully implemented as the previous Khan-led government decided to cut or eliminate some subsidies and cut revenue and tax collections. had reneged on agreements to make improvements.
Islamabad has received $3 billion so far, with the program ending later this year. Officials are seeking an extension of the program until June 2023, as well as the release of the next $1 billion tranche.
Prime Minister Shahbaz Sharif now has a choice to make the unpopular decision and choose to withdraw subsidies on fuel and electricity or to hold early elections. Since taking office, Sharif has repeatedly rejected the summaries of the finance, oil and gas ministries for the fuel price hike, feeling it would lead to public opposition. His coalition partners advise him to take tough decisions, while several office-bearers of his own Pakistan Muslim League-Nawaz have suggested him to dissolve the National Assembly and avoid becoming a scapegoat for the previous government’s incompetence.
In talks with the IMF, the delegation of Pakistan, which includes representatives of State Bank Of Pakistan (SBP), Federal Board of Revenue (FBR) and the Ministry of Energy are headed by Finance Minister Mifta Ismail. IMF has set tough conditions for this Pakistan For a bailout that seems to have a political price for a beleaguered coalition government. IMF wants Pakistan to withdraw former PM Imran Khan’s subsidy on fuel and electricity KHAN It was announced earlier this year. When former opposition parties ran a no-confidence vote against Khan, he had announced a steep cut in the price of petrol and diesel by Rs 10 per liter and electricity by Rs 5 per unit as well as announcements related to tax cuts. . Interest free loans to students, small farmers and unemployed youth.
Khan’s decisions won him popular support, but it has badly affected three markets – debt, stocks and foreign exchange – leading to a serious financial crisis in the country.
Recently, the Pakistani Rupee touched a crucial level of 200 in the open market against the US Dollar. Rupee has been in a declining trend since last 13 months. It has lost 30.28% (or Rs 46.12) so far as compared to a record high of Rs 152.27 in May 2021.
In the interbank market, however, the local currency is losing its value and with the latest fall of Rs 2.1, it fell to another historic low of Rs 198 against the greenback, despite dubious intervention by the central bank.
Investors are worried as there is speculation in the market that the IMF may not agree to restart the loan program if the government fails to implement its demands.
Pakistan signed a $6 billion bailout package with the IMF in 2019, which was never fully implemented as the previous Khan-led government decided to cut or eliminate some subsidies and cut revenue and tax collections. had reneged on agreements to make improvements.
Islamabad has received $3 billion so far, with the program ending later this year. Officials are seeking an extension of the program until June 2023, as well as the release of the next $1 billion tranche.
Prime Minister Shahbaz Sharif now has a choice to make the unpopular decision and choose to withdraw subsidies on fuel and electricity or to hold early elections. Since taking office, Sharif has repeatedly rejected the summaries of the finance, oil and gas ministries for the fuel price hike, feeling it would lead to public opposition. His coalition partners advise him to take tough decisions, while several office-bearers of his own Pakistan Muslim League-Nawaz have suggested him to dissolve the National Assembly and avoid becoming a scapegoat for the previous government’s incompetence.