Staff-level agreement with IMF expected next week: Dar

Finance minister thwarts default rumours, says economic indicators moving in the right direction

Federal Finance Minister Ishaq Dar on Thursday announced that a staff-level agreement with the International Monetary Fund (IMF) was to be signed soon as the negotiations between the international money lender and Pakistan were about to conclude.

Taking to his official Twitter handle, the minister also dismissed “malicious rumours that Pakistan may default” by “anti-Pakistan elements”.

Anti-Pakistan elements are spreading malicious rumors that Pakistan may default. This is not only completely false but also belie the facts. SBP forex reserves have been increasing and are almost
US $ 1 billion higher than four weeks ago despite making all external… 1/2

— Ishaq Dar (@MIshaqDar50) March 2, 2023

Dar maintained that the “completely false” default rumours belied the “facts”.

He detailed that the State Bank of Pakistan’s foreign exchange reserves were increasing and are almost US $1 billion higher than four weeks ago despite all external due payments being made.

“Foreign commercial banks have started extending facilities to Pakistan,” he added.

due payments on time. Foreign commercial banks have started extending facilities to Pakistan. Our negotiations with IMF are about to conclude and we expect to sign Staff Level Agreement with IMF by next week. All economic indicators are slowly moving in the right direction. 2/2

— Ishaq Dar (@MIshaqDar50) March 2, 2023

The minister stated that all economic indicators were “slowly moving in the right direction”.

The statement comes shortly after the Pakistani rupee plunged 8.29% (or Rs24.07) to a new all-time low of Rs290.18 against the US dollar in the interbank market on Thursday.

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The rupee continued its significant loss of value on the second consecutive day since the government reinstated the market-based exchange rate on the directive of the IMF.

The currency hit a record low this morning as importers are panic buying dollars while exporters have reportedly withheld selling the greenback - waiting for a higher exchange rate.

Reports in the market suggest that the IMF wants the value of the rupee in the interbank market to match its value in the black currency market.