IMF Board meeting delayed on govt’s request: Tarin

ISLAMABAD: The International Monetary Fund (IMF) on the government’s request has delayed its board meeting for the sixth review of the Extended Fund Facility (EFF), an official said.

Federal Minister for Finance and Revenue Shaukat Tarin said that the government requested the IMF to delay its board meeting as the State Bank of Pakistan (SBP) Amendment Bill 2021, needs to be passed from the Senate.

After recovering from Covid-19, the finance minister in a first media interaction, said that the SBP Amendment Bill 2021, will be presented in the Upper House this week for approval.

“Yes we requested the IMF authorities to extend the date of the Executive Board meeting and they were kind enough to do it, for which we are very grateful,” he remarked.

The bill has already been passed by the National Assembly. The IMF Board after the sixth review will release a $1 billion tranche under the Extended Fund Facility (EFF).

The Finance Minister said that when the government took over, it was facing many challenges including massive current account deficit, external debt payments of $29 billion, whereas the forex reserves of the SBP were a mere $7 billion.

Because of the gravity of the situation, the Prime Minister was compelled to approach friendly countries to avoid default. However, he said, despite financial assistance from friendly countries, the government was forced to approach the IMF to overcome the financial crisis.

Tarin said that Afghanistan’s dependency on Pakistani rose after the withdrawal of the US forces from Afghanistan and the Biden Administration’s decision to freeze Afghan government’s foreign currency accounts.

“Afghan crisis put immense pressure on our exchange rate and at one point the outflow of dollars to Afghanistan amounted to $20 million per day and to stop this we took drastic measures,” Tarin said.

He said because of the humanitarian crisis in Afghanistan, the government gave permission to export some essential commodities but allowed the trade between the two countries in the rupee terms, adding that the barter trade with Afghanistan is also under consideration because Pakistan also imports some items from Afghanistan.

On a query that the Prime Minister Imran Khan paid income tax of only Rs2,82,000 in 2018, which jumped to Rs9.8 million in 2019, Tarin said that it is possible that the prime minister sold something or made profit on his investment but ruled out any element of corruption.

“The prime minister cannot do corruption of Rs300 million to boost his income, it is a very silly and petty allegation in my view,” he commented.

Regarding the SBP instruction to commercial banks to start taking into account the probability of default on loans taken by the federal government, he said the government already took up this issue with the central bank and urged it to show flexibility on it.

The government is planning to introduce an economic relief package for the salaried middle class soon, Tarin said, adding that the government is focusing on improving the productivity of the manufacturing and agriculture sector.

He said that the government wants to enhance the IT exports from the current level of $3 billion to $50 billion in the next 10 years, while admitting the fact that the IT exports are under-reported and much of it reflects in remittances.

“As per my calculation around $3 billion of IT exports by freelancers are not mentioned in the IT exports, I asked the State Bank of Pakistan to open Special Convertible Rupee Accounts for the freelancers of the IT profession so that their income could reflect in the export earnings,” he said.

The finance minister expressed hope that the prices of crude oil, edible oil and other essential commodities will soon show a declining trend, easing off the inflationary pressure.