Economy will stabilise now, says Dar after IMF deal

Finance Minister Ishaq Dar said on Monday that the country’s economy will stabilise following the stand-by $3 billion deal with the International Monetary Fund (IMF).

Dar made these remarks while speaking at Geo News’ programme ‘Aaj Shahzaib Khanzada Kay Sath’.

His statement comes after Pakistan’s sovereign dollar bonds rose as much as 1 cent, while the Pakistan Stock Exchange (PSX) witnessed the highest single-day gain of 2,400 points on Monday, following a last-minute $3-billion IMF deal.

The finance minister predicted that the country’s foreign exchange reserves, currently standing at $9.34 billion, will also increase to $14 billion by the end of July.

“The first IMF installment of $1.1 billion from IMF will be received in July. We will also receive $2 billion from Saudi Arabia and $1 billion from the United Arab Emirates (UAE) later this month,” he said, adding that the country’s current account deficit and the core inflation will also go down by the end of this month.

To a question about the policy rate, Dar said new taxes on the masses and a hike in the policy rate were IMF’s one of conditions for the deal.

The finance minister conceded that the electricity tariff will eventually increase due to the decision taken by the government.

He, however, expected “things to settle down” in the next few months.

Speaking about the IMF deal, Dar said many of his own team members doubted they will be able to secure the deal. “However, I was confident that an agreement will be reached before the June 30 deadline.”

He said he had requested a 9-month-long $3.5 billion stand-by agreement, but the number was revised to $ 3 billion with a condition that the first tranche will be equivalent to the amount of the 9th review, which was $1.1 billion.