The IMF has insisted on tightening monetary policy.
A virtual meeting was held between Pakistan and the IMF yesterday, after which Pakistan’s efforts to finalize the Staff Level Agreement were intensified.
Sources say that the IMF demanded a stricter monetary policy, tightening the monetary policy is likely to increase the interest rate.
State Bank’s base interest rate is 17 percent, a further two percent hike has been demanded.
Sources said the State Bank sold T-bills at an interest rate of 2.9 percent above the base rate, under pressure from the IMF to tighten monetary policy in line with inflation.
According to the sources, Pakistan informed the IMF about the previous measures, Pakistan also gave a briefing on the financing of friendly countries, a briefing was also given on refinancing with China.
According to sources, the IMF was briefed on China’s $700 million refinancing decision and was briefed on the $1.2 billion financing from the United Arab Emirates.
Sources also say that the financing was informed through shares in the stock market of UAE and Qatar.
Pakistan also presented a foreign exchange reserve target strategy by June.
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