WASHINGTON: The International Monetary Fund announced it had approved a standby arrangement for the Pakistan Government to purchase foreign exchange currencies up to the equivalent of 100 million Special Drawing Rights (SDR) over the next 12 months.

The IMF said the drawing is to support Pakistan exchange reforms, including devaluation of the rupee, and a financial programme designed to prevent the emergence of new inflationary pressures.

The financial programme seeks to eliminate excessive expansion of bank credit and will also permit an acceleration of the development efforts, the IMF said.

The fiscal deficit will be curtailed in the fiscal year 1972/73 through various means now under study, including an increase in agricultural taxation and public utility rates, as well as a reduction in current expenditures.

The Government is also seeking arrangements with creditor countries on a rescheduling of Pakistan’s external debt, which would ease considerably the pressure on the budget. [Meanwhile] an Aid-to-Pakistan Consortium meeting on May 26 in Paris is expected to pledge assistance worth 180 million dollars to Pakistan for the coming financial year. …

Published in Dawn, May 19th, 2022