ISLAMABAD: During an introductory virtual engagement with the staff mission of the (IMF), Caretaker Finance Minister Shamshad Akhtar is said to have promised the consistent implementation of the policy actions committed under the $3 billion Standby Arrangement during the tenure of the caretaker government in order to ensure economic stability. This promise was reportedly made in order to ensure that financial stability is maintained during the term of the caretaker government. According to reports, this commitment was created in order to guarantee that the current state of the economy would remain stable during the term of the caretaker administration. Reports indicate that this pledge was made in order to ensure that the existing status of the economy would stay steady for the duration of the administration that was designated to serve in a caretaking capacity.
According to credible sources, the two parties got together for a light-hearted chat in order to discuss a recent update about the program’s execution. The topic of discussion? They placed a particular emphasis on the structural benchmarks that are essential for the successful completion of the second quarterly review, which is due in either the middle of October or the beginning of November depending on the data from the end of September. It is anticipated that this assessment will take place in October or the beginning of November. If this evaluation is successful, it will clear the way for the distribution of the second tranche, which has a value of around $710 million, to take place in December.
In response to requests for remarks, neither Dr. Akhtar nor Esther Perez Ruiz, who is the IMF Resident Representative, gave an answer.
The secretary of finance recently informed the fund that the policy actions that were required to be taken by the end of July had been completed with the notification of a 26 percent increase in electricity rates and that the (Nepra) had completed the hearing process for automatic information of monthly fuel price adjustments (FPAs) and quarterly tariff adjusments. The fund was informed that the policy actions that were required to be taken by the end of July had been completed with the notification of a 26 percent increase in electricity rates. The secretary of finance most recently conveyed these pieces of information to the fund. On the other hand, reliable sources allegedly said that the government side reiterated what the secretary of finance had just very recently conveyed to the fund, which is that all of the relevant policy actions had been finished. The most recent letter has provided confirmation of this information.
According to what has been discussed, the procedures may produce some delays, and it is possible that these delays will be severe. Despite this, the recovery of dues will be assured in such a way that the circular debt flow will remain, for the most part, within the agreed-upon goals. This will be accomplished by ensuring that the circular debt flow will remain. This will be done while simultaneously taking into mind the fact that the needs for the end of the quarter and the sinking consumption will be met. According to these sources, the meeting that took place on Thursday evening did not anticipate the nationwide protests against skyrocketing electricity bills that would turn violent in major cities as a result of tariff rebasing, heavy FPAs, and financing cost surcharges imposed by the government while the Rs5.40 per unit QTA had not yet been implemented. These factors were the direct result of the government imposing these surcharges while the Rs5.40 per unit QTA had yet to be implemented. The fact that the government decided to set these surcharges while the Rs5.40 per unit QTA was still in the process of being implemented was the primary cause of these problems. The fact that the government chose to apply these surcharges while it was still in the process of implementing the Rs5.40 per unit QTA was the fundamental source of these troubles. The administration took the decision to continue with the implementation of these taxes notwithstanding the fact that the Rs5.40 per unit QTA had yet to begin to take effect. This has the potential to have a negative impact on the process of recovering from the debt and to lead to slippages in the targets for the circular debt.
As per recent reports, the International Monetary Fund (IMF) has voiced some concerns over the current outsourcing of port facilities on a G2G basis and has reemphasized the necessity of the end-November structural standard in this respect. Additionally, the IMF has stressed the need of meeting the benchmark by the end of November. The imf is concerned about the recent G2G outsourcing of port facilities due to the fact that the government is obligated to bring all state-owned businesses (SOEs) under the jurisdiction of a central monitoring unit (CMU) in the Ministry of Finance for financial management by the end of November. In order for the government to meet the target that was established for the month of November, it will be necessary for the government to improve the administration of SOEs by converting the existing SOE law into a policy that makes a distinction between the different ownership arrangements that are in place. This will be done by translating the present SOE legislation into a policy. In order for the government to succeed in achieving the objective that was set for the month of November’s conclusion, this will be required.
Another aspect that is receiving close attention is the widening gap between the currency exchange rates that are available on the interbank market and those that are available on the open market. This gap is far greater than the barrier that was considered and voted upon in the past. As part of the SBA, Pakistan committed to maintaining the disparity at or below 1.25 percent on a weekly average basis; nevertheless, it has stayed in the vicinity of 3 to 4 percent in recent weeks. This is in contrast to Pakistan’s vow. Despite the fact that Pakistan has pledged to fulfill its obligation, this has come to pass. According to the sources, Dr. Akhtar has guaranteed the fund the assurance that the exchange rate would remain market-based without any interference from the government or any other artificial environment. In the past, Dr. Akhtar has worked closely with the SBP team to design a broad variety of specific administrative processes, and this collaboration has been quite fruitful.
Regardless of the fact that the IMF had earlier issued a caution stating that “the full and timely execution of the program would be important for its success in view of the challenging obstacles,”
they made it abundantly clear when they signed the SBA in July that the new SBA would provide a policy anchor as well as a structure for the provision of financial assistance by international and bilateral partners in the time that is to come. This was communicated when they signed the SBA. This was done in view of the fact that, in light of the obstacles, the new SBA would serve as both an anchor and a framework for the process of policymaking. This was the reasoning for the decision to do this. During the process of making this decision, this was one of the factors that was considered.