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Prime minister Shehbaz urges IMF chief to soften conditions for Pakistan

ISLAMABAD: Prime Minister Shehbaz Sharif has urged the Managing Director of the IMF Kristalina Georgieva to soften IMF’s conditions for Pakistan due to post-flood problems, high energy prices and record inflation in the country.

Premier urged the IMF’s big-boss to relax fund’s conditions for further increase in energy prices and imposition of more taxes in 2023.

Prime Minister stated this in a telephonic call to IMF managing director Kristalina Georgieva on Thursday.

PM Shehbaz is also expected to further discuss the disbursement of next IMF tranche on the sidelines of the Geneva Conference being held on Jan 9 in collaboration with the United Nations.

On the request of Pakistan, the UN has arranged the conference to muster international support to pace up flood relief and rehabilitation in the country.

PM Shehbaz is scheduled to leave for Geneva, Switzerland in a couple of days to attend the conference on Monday.

Dollar Background

Meanwhile, the foreign exchange reserves with the State Bank of Pakistan fell to an eight-year low, at $5.57 billion during the week ended on Dec 30, 2022.

Despite rapidly depleting SBP reserves Finance Minis­ter Ishaq Dar is still hopeful about reverting the default. The hopes are hinged on the financial help from the friendly countries _ Saudi Arabia and China.

The forex reserves saw an outflow of $245 million for external debt repayments during the current week.

The falling reserves have already deeply devalued the local currency against the US dollar and other major currencies. The SBP’s foreign exchange reserves dipped $11bn to $5.6bn from $16.6bn in Jan­uary 2022.

Foreign debt servicing is the most troubling question for the PMLN-led coalition government facing a serious threat of default. Several attempts to restart talks with the IMF for the release of the next tranche have so far remained unfruitful.

This massive decline left no space for the government to pay back its foreign debt. Borrowing from more from friendly countries is indispensable. The SBP’s reserves holdings are only enough for imports of three weeks.

The country’s total foreign exchange reserves during the week were $11.4bn including $5.8bn of commercial banks.

Javed Mahmood
Written By

I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.

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