The International Monetary Fund has stressed upon Pakistan to tighten its monetary policy and enhance interest rate.
The demand came at a virtual meeting held between Pakistan and the IMF on Thursday. IMF officials reviewed efforts made by Pakistan to complete the staff level agreement.
Sources say that Pakistan has been facing pressure to implement on the Fund’s requirements through advance measures in time.
They said tightening the monetary policy is likely to increase interest rates. The State Bank of Pakistan’s base interest rate is currently 17 per cent while the IMF is calling for another 2pc increase in interest rates. The IMF is pushing for a tightening of monetary policy based on inflation.
According to the sources, Pakistan side informed the IMF about the previous measures, gave a briefing on the financing of friendly countries, and China’s refinancing decision of $700 million.
Sources further said the IMF was also briefed on the financing of $1.2 billion from the United Arab Emirates, in addition to the financing through shares in the stock market of the UAE and Qatar.
During the virtual meeting, Pakistan presented its foreign exchange reserve target strategy till June.
