More challenges for Dar!

Raising $2 billion and having a commitment of $7 billion from international bond market with a lions share from the US domestic investors is a job well done by Dar and team! Though the rates were too high and analysts are susceptible about the utility of the money raised, it has defined the appetite of global bond markets for Pakistan. In a nutshell, its a confidence booster.
But, at the same time, economic and accounting managers of the country shall not be overwhelmed in jubilation of grants from the Middle East ($1.5 bn) and loans ($2 bn) from the West. The ground realities are that in an economy of $260-270 billion with fiscal deficit of $12-15 billion a year, raising onetime $3-5 billion is not substantial.
Structural imbalances, both on the fiscal and monetary side have to be resolved for smooth sailing. Then the energy shortages have to be met by both capacity enhancement and resolving massive leakages in billing and recovery.
The government should chart down a plan on the utility of $2 billion arrived on Euro Bond issue at an exuberant rates. It may be used to square Rs190-200 billion of governments borrowing from the SBP which is an effective free debt to government as the interest charged by the central bank is eventually transferred to government as SBPs profits.
Is it a viable option to pay around 8 percent in dollar terms for it? Or it may be deployed for some investment in power or other infrastructure projects; then its return should be higher than the cost of loan.
Similarly, some math has to be done for $1.5 billion coming from the KSA-Does the perceived cost of change in foreign policy satisfy the free of charge money coming in? Such debates shall take place in the parliament and Dar should come out with viable plans to justify all the doubts and suspicions. He should also have some solid argument to counter that how Greece, two notches below Pakistans rating raised more money at 350 basis points less and had generated much more investors interest than Pakistan.
Then Dar and company shall pull their socks up and put their heads down to deal with the Funds mission later this month. There is a good chance that Pakistan is going to miss the NDA target for March. More importantly, Real Effective Exchange Rate must have appreciated by 5-7 percent and equilibrium in REER is very close to the Funds heart.
Hence, the Fund may repeat the do-more mantra and ask to build reserves to bring exchange rate in equilibrium. For doing so, nominal currency has to depreciate and interest rates have to remain high. Ironically, newly appointed deputy governor of SBP has publicly said a good news is due to business community from the central bank. Now this kind of statement intruding the domain of central banks board of directors can invite the IMFs wrath. Interestingly, markets have reacted and yields on PIBs have started coming down since.
Fund mission may ask government to adjust currency according to REER and may also ask to keep rates high for building reserves and bringing macroeconomic stability. But Dar is busy bringing currency down to below Rs98 per dollar and easing monetary policy is an integral part of the ruling partys manifesto. Lets see, what has Dar to offer when he meets the Fund on April 28, in Dubai.