According to people with knowledge of the development, the IMF requested that the federal government solely sell sukuk bonds on the stock market and refrain from taking out loans from the State Bank of Pakistan.
Additionally, the IMF has requested that the Pakistani government fix the interest rate in accordance with inflation and adjust the dollar exchange rate based on market conditions.
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According to the sources, in order to lower the budget deficit, the IMF also pushed for the adoption of a stringent monetary policy.
They insisted that the primary causes of the deficit are Pakistan’s debt and interest payments, and they requested that the finance ministry cut back on other spending, including pensions.
According to the sources, loan interest payments for the current fiscal year are anticipated to total Rs 8,371 billion, while approximately Rs 9,787 billion will be allocated for loan interest in the budget for the following fiscal year.
Interest on both internal and external loans has been paid in the first nine months of the current financial year, totaling Rs 5,518 billion.
During a press briefing, Julie Kozack, the Director of IMF Communication, declined to comment when asked about the staff-level agreement, implying that the negotiations are still in progress.
“Today, Pakistani authorities are holding a meeting with a mission team led by Nathan Porter to discuss the next phase of our engagement.”
“Our Executive Board completed the second review of the stand-by arrangement for Pakistan on April 29 of this year, allowing a disbursement of approximately $1.1 billion,” the spokesperson stated.