IMF pressure on Pakistan, demand for increase in interest rate

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IMF asks Pakistan to tighten economic policies
Representative Photo

The International Monetary Fund (IMF) has insisted that Pakistan tighten its monetary policy.A virtual meeting was held between Pakistan and the IMF yesterday in which Pakistan made efforts to complete the staff level agreement.Pakistan is facing constant pressure to take advance measures in time by the IMF and that it has to tighten it’s monetary policy.

Tightening monetary policy is likely to increase interest rates, State Bank’s base interest rate is currently 17 per cent while the IMF is calling for another 2 per cent increase in interest rates.The IMF is pushing for a strict monetary policy based on inflation.

In the meeting held, Pakistan informed the IMF about the previous measures, Pakistan also gave a briefing on the financing of friendly countries and China’s refinancing decision of 700 million dollars.The IMF was also briefed on the financing of 1.2 billion dollars from the United Arab Emirates, in addition to the financing through shares in the stock market of the United Arab Emirates and Qatar. Pakistan also presented its foreign exchange reserve target strategy till June. Earlier a leading British daily leading newspaper the Financial Times analysts had written about the economy of Pakistan and that there are fears of the Pakistani economy sinking.

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