According to the latest data, the State Bank currently has $4.38 billion in foreign exchange and before the end of the current financial year (by the end of June), it has to repay 3.70 billion dollars in loan installments. According to economic experts, in the budget of the next fiscal year, at least 12 to 16 billion dollars must be kept in the national exchequer.
Finance Minister Ishaq Dar has confidently clarified that the government has ensured all external payments till December, in the light of which the economy will continue to run and the country will not go bankrupt. The links of this statement of the finance minister are found in the press conference scheduled in Washington by the spokesperson of the IMF. In the context of the current economic situation of Pakistan, the successful completion of the ninth review under the bailout package of seven billion dollars was emphasized.
The need for additional assistance has been expressed in the face of recent challenges to deal with the financial problems created by the floods. Two months ago, the International Monetary Fund asked China, Saudi Arabia and the United Arab Emirates to arrange more funds from other sources after meeting its pre-conditions for issuing a $1.2 billion loan tranche. Arranged. Although the volume of one billion 20 million dollars is much less than the total estimates including external payments, thanks to this, the hope of receiving funds from more institutions and countries seems bright. The IMF has made it clear to an international rating agency that Pakistan will not directly subsidize anything as promised, the government will introduce a new system of tax exemptions and a market-based exchange rate to determine the value of the rupee. The exchange rate will be determined.
It should be remembered that the government wanted to introduce a new system regarding the price of petrol in March, under which the intention was to pass the benefit to the poor in the form of subsidy while making petrol more expensive for high consumers. Most affected due to inflation. Finance Minister Ishaq Dar says that the delay in the IMF deal should not be linked to default. He admitted that the staff-level agreement should have been finalized much earlier as it was negotiated on February 9, soon after which all advance demands were met, though the government had to pay a heavy political price. In the light of the above-mentioned press conference of the spokesperson of the IMF and the statement of Finance Minister Ishaq Dar, it seems to be clear that after receiving the latest tranche of loan under the ninth review, the process of next level negotiations will start soon. The finance minister has made it clear that no condition regarding further inflation will be taken into consideration.
The recent negotiation process under the Ninth Review, which began in November, has lasted an unprecedented seven months and has been largely exploited by opportunists in the form of an appreciation of the dollar. A sum of 225 to 299 rupees and as a result inflation increased day and night and the life of the common man became double.
For a few days now, the news has been circulating that the government is considering increasing the salaries by 50% in the upcoming budget. This is an inevitable requirement of the current situation of inflation. It will be necessary to achieve this by setting budgetary targets that do not affect the salaried class, bringing down the prices of essential commodities as much as possible should also be part of the government mechanism.