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.