Policy rate hike
\n ISLAMABAD
\nPakistan has assured the International Monetary Fund (IMF) to raise its policy rate by 2% in order to flfill the conditions set by the lender to revive the loan programme.
\nThe sources aware of the development told Geo News that virtual negotiations with the IMF continued till late at night, adding that officials from the international lender were \u201cpainstakingly reviewing\u201d every aspect.
\n\u201cPakistan has agreed to raise its policy rate by 2%,\u201d the sources said, which is currently at 17%.
\nThe sources also added that details regarding reforms in the power sector are being finalised and after the settlement, a staff-level agreement will be signed.
\nThe power sector has remained a hurdle so far as it has become one of the major stumbling blocs between Pakistan and the IMF.
\nPakistan has also briefed the lender in detail on external financing till June, the sources said, adding the IMF is also holding talks with those countries for assurance. There\u2019s no discussion being held regarding the political situation of Pakistan, the sources further added.
\nPakistan-IMF talks
\nPakistani authorities have been negotiating with the IMF since early February over policy framework issues and are hoping to sign a staff-level agreement (SLA) that will pave the way for more inflows from other bilateral and multilateral lenders.
\nOnce the deal is signed, the lender will disburse a tranche of more than $1 billion from the $6.5 billion bailout agreed to in 2019.
\nPakistan has already taken a string of measures, including adopting a market-based exchange rate; a hike in fuel and power tariffs; the withdrawal of subsidies, and more taxation to generate revenue to bridge the fiscal deficit.
\nThe strict measures are likely to further cool the economy and stoke inflation, which stood at 27.50% in January.
\nThe South Asian country\u2019s economy has been in turmoil and desperately needs external financing, with its foreign exchange reserves dipping to around $3 billion, barely enough for three weeks\u2019 worth of imports.
\nTough conditions
\nPrime Minister Shehbaz Sharif said a day earlier that Pakistan has to unwillingly accept the strict conditions to provide a lifeline for an economy in turmoil.
\nHe was speaking to top security officials at his office in Islamabad in a meeting that was telecast live.
\n\u201cWe have to accept unwillingly the strict conditions for the IMF deal,\u201d he said, adding that an accord was still a \u201cweek, 10 days\u201d away.
\nLongtime ally China this week announced refinancing of $700 million, according to Pakistan\u2019s finance ministry.
\nFinance Minister Ishaq Dar on Friday said Pakistan\u2019s central bank has received the money.
\n\u201cThank God,\u201d he said in a tweet.<\/p>\n","protected":false},"excerpt":{"rendered":"
Policy rate hike ISLAMABAD Pakistan has assured the International Monetary Fund (IMF) to raise its policy rate by 2% in order to flfill the conditions set by the lender to revive the loan programme. The sources aware of the development told Geo News that virtual negotiations with the IMF continued till late at night, adding […]<\/p>\n","protected":false},"author":2,"featured_media":316119,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-316104","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n