Islamabad:
The Express Tribune reported that Pakistan’s government has agreed to raise the policy interest rate, which is 17 per cent, by two per cent or 200 basis points to meet another condition set by the International Monetary Fund (IMF).
With the new decision, Pakistan has accepted another precondition of the IMF to release USD 1.1 billion in critical funding, which is a part of the USD 6.5 billion bailout package, the report said. The report said that Pakistan has announced an increase in the interest rate based on the rates set in the auction by the government to increase the domestic debt.
The Express Tribune reported that the decision by Pakistan authorities would bring the interest rate down to 19 percent, just below the previous record of 19.5 percent set in October 1996.
Sources in Pakistan’s finance ministry said that a technical level discussion between Islamabad and the IMF review mission had taken place virtually.
According to a report in The Express Tribune, sources revealed that there was an expectation that Pakistan would hike the interest rate by two per cent. According to sources, talks between the Pakistan government and IMF officials on some issues in the power sector are in the final stages.
Earlier this month, the Pakistan government and IMF staff completed the ninth review of the US$6.5 billion bailout package without staff-level agreement. The Pakistani government hoped that they would be able to convince the IMF to gradually introduce conditions.
However, Islamabad’s hopes were dashed during the IMF mission’s 10-day visit to Pakistan.
Geo News reported that amid an unprecedented economic crisis in the country, Pakistan’s Prime Minister Shehbaz Sharif directed the foreign ministry to cut down on the number of foreign missions as part of austerity measures.
Prime Minister Shehbaz Sharif announced the decision on 22 February.
An instruction issued by the PM’s office said, “The Prime Minister is pleased to direct that a well thought out proposal/plan in this regard may be submitted to this office within two weeks in due course.”
Shahbaz has issued instructions to the Ministry of External Affairs to downsize several foreign missions abroad and reduce their offices, staff and other measures to cut expenditure by 15 per cent, Geo News reported.
According to news reports, the official communication titled “Rationalization of Foreign Missions abroad” states that in view of the ongoing economic constraints and the consequential need for fiscal consolidation and control of external deficit, the Prime Minister has constituted a National Austerity Committee. did. (NAC).
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