Rupee increases as IMF rescue Pakistan from default risk
The much-anticipated bailout programme for Islamabad was renewed by the executive board of the International Monetary Fund (IMF), which caused the Pakistani rupee to appreciate versus the US dollar on Tuesday during intraday trade.
In intraday activity on the interbank market, the rupee strengthened by 2.42 percent to 219.50 against the US dollar from Monday’s closing of 221.92.
Officials from the government said Monday night that the international lender has authorized the seventh and eighth evaluations of the $6 billion Pakistan initiative after months of frantic work.
Paracha emphasized that the government’s efforts to tighten its belt after the contract finally materialized after much delay resulted in an upsurge in smuggling.
The substantial regulatory taxes placed on imports, according to Paracha, led to an increase in the smuggling of commodities, which caused a shortage of dollars in addition to the smuggling of dollars to Afghanistan.
Although the loan from the international lender was $1.1 billion, he pointed out that it would open the door for Pakistan to get more funding from other multilateral and bilateral organizations.
According to Paracha, the foreign direct investment will rise as well, and she anticipates that the general economy will improve over the next few days.
The Extended Fund Facility (EFF) for Pakistan’s “extended arrangement” has now through its combined seventh and eighth reviews, according to a statement from the Fund.
According to the announcement, “The Board’s resolution permits an immediate disbursement of SDR 894 million (about $1.1 billion), bringing the total purchases for budget support under the arrangement to approximately US$3.9 billion.”
Rupee increases as IMF rescue Pakistan from default risk
The loan was extended until June 2023 with approval from the international lender to raise its size.
