The International Monetary Fund (IMF) is ready to support Pakistan and the package of reforms is now more important than the size of a new programme, the fund’s Middle East and Central Asia director said.
“I think what is important at this stage is to accelerate the reforms, double down on the structure of reforms in order to provide Pakistan with its full potential of growth,” Jihad Azour told a press conference on the sidelines of the IMF 2024 Spring Meetings.
Finance Minister Muhammad Aurangzeb is currently in Washington to attend the spring meetings organised by the IMF and the World Bank (WB).
Aurangzeb stated earlier that Pakistan had initiated discussions with the Fund over a new multi-billion dollar loan agreement to support its economic reform programme, adding that the country will at least be requesting a three-year programme.
Aurangzeb has stated that the government does not expect significant rupee devaluation as part of negotiations with the IMF, according to a report by Bloomberg.In an interview with Bloomberg published today, the minister said there would be no reason for the rupee to depreciate more than the range of about 6 per cent to 8pc seen in a typical year.
“Pakistan last devalued its currency in January 2023,” the report noted.He said that while massive devaluations had accompanied some of Pakistan’s previous IMF loans and are often a condition of the crisis lender’s programmes around the world, nothing comparable should be necessary this time around.
“I don’t see the need for any step change,” Aurangzeb said, citing solid foreign exchange reserves, a stable currency, rising remittances and steady exports. “The only thing which can be a wild card, although in our projections we should be okay, is the oil price,” he said.
He said that the government was looking to bolster industries, including agriculture and information technology, hoping it would help push the nation’s growth above 4pc in the coming years.
The report further said that Pakistan faced about $24 billion in external financing needs in the fiscal year starting July, adding that Aurangzeb said Pakistan was in a “relatively good shape” to make those payments.
