IMF’s Agreements Violation Caused Dollar Rate Rise, says Miftah
Finance Minister Miftah Ismail has blamed the previous PTI-led govt for the nation’s present financial crisis, claiming that the regime of former PM Imran Khan’s “flawed agreement” with the International Monetary Fund (IMF) caused prices to increase and the rupee to depreciate against the US dollar.
“The rate of the dollar will drop lower only if we escape out of the grips of the deal Imran Khan signed with the IMF.” “Improving the economy that Khan’s left is not a simple assignment,” he stated on Friday.
He went on to say that the PTI government’s announcement of a fuel subsidy has put a financial strain on the economy.
Fuel subsidies were anticipated to be worth Rs120 billion this month, according to the minister, who added that no govt could stomach such a significant sum of money. He noted that if the govt does not have funds but continues to provide subsidies, it would have to borrow more.
The currency is under pressure because of rising interest rates, and the Imran Khan-led govt has taken out loans totalling Rs20,000 billion, the greatest sum in the country’s history, according to Miftah.
The PML-N-led administration is under significant financial strain as a result of this debt, and the foreign exchange reserves left by the former govt are barely enough to cover a few days’ worths of import bills, he noted.
Miftah said that the PTI-led government had broken the terms of the IMF deal, which had placed the project on hold.
“The IMF deal must be renewed.” “Imran caused issues in all nations’ relations, especially China and Saudi Arabia,” he continued.
For the 5th straight working day, the Pakistani rupee fell 0.64 % (Rs1.23) to a new record low versus the US dollar, reaching Rs193 in the interbank marketplace.
According to the State Bank of Pakistan, the domestic currency closed at Rs191.77 versus the global currency the day before (SBP).
Following the latest devaluation, the central bank said on Thursday that the country’s foreign exchange reserves had fallen to a 22-month low of $10.3 billion.
As a result of the country’s declining reserves, Pakistan’s capacity to import and service international debt has shrunk in recent months. The $10.3 billion reserves have decreased the country’s import protection to less than two months, as opposed to the typical three months.
Pakistan is set to begin negotiations with the International Monetary Fund (IMF) on May 18 in Doha, as the country’s choices for avoiding insolvency have been constrained after it was unable to get quick large financial help from its three friendly nations.