ISLAMABAD   -   Pakistan has sent back the Letter of Intent to the International Mon­etary Fund (IMF) after Finance Minister and Governor State Bank of Pakistan have signed it.

The Executive Board of the IMF would meet on July 12 to consider to approve first tranche of $1.1 billion for Paki­stan under the Stand-By Arrangement. 

Pakistan and Interna­tional Monetary Fund (IMF) have recent­ly reached a staff-level agreement on policies to be supported by a $3 bil­lion Stand-By Arrange­ment (SBA) for a period of nine months. In a re­cent development, the government has sent back the Letter of Intent, which was signed by Fi­nance Minister Ishaq Dar and Governor State Bank Jameel Ahmed.

An official informed that the government has giv­en assurance to the IMF no tax amnesty scheme will be announced during the nine-month programme of the Fund. It has also assured that tax revenues would be increased and the government would fol­low the fiscal discipline to control the budget defi­cit of the country. It has also stated that energy re­forms will be implemented and also reforms will be introduced in state institutions.

Exchange rate would be determined by market and the government would not impose restric­tions on trade and it would implement assurances of lending countries, institutions. The government would take measures to increase foreign exchange reserves.

The revival of the IMF programme would provide more than one billion dollars inflows to Pakistan but it would also pave way for getting funds from other bilateral and multilateral sources to increase its foreign exchange reserves. Pakistan entered into IMF programme in 2019. However, out of total $6.5 billion total programme size, Pakistan had not re­ceived the amount of $2.6 billion because of the in­complete 9th, 10th and 11th reviews of the bailout package.

The IMF has set few conditions for staff-level agreement on policies to be supported by a $3 bil­lion Stand-By Arrangement (SBA) for a period of nine months. However, the government would once again take tough decisions including increasing pe­troleum levy, power and gas tariffs under the new SBA. Finance Minister Ishaq Dar on Friday last had announced to maintain the petrol prices after in­creasing petroleum levy by Rs5 per liter, taking it to Rs55 per liter. The PDL on petrol has been imposed from the start of the new fiscal year, i.e. July 1.