Govt to comply with FATF action plan; Hafeez tells US delegation

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ISLAMABAD

International Monetary Fund (IMF) has said that the bailout for Pakistan is meant for reforms to stabilize the economy. IMF resident representative in Islamabad Teresa Daban Sanchez talking to newsmen here said that the IMF programme will ensure stability of growth rate in Pakistan. The reforms under the programme will extend stability to the economy.

The lending institution stresses for increase in tax recoveries, autonomy of the central bank and reining in the inflation rate, IMF official said.

Another characteristic of the bailout package is ensuring that market forces determine the value of the currency. Teresa Daban said that Pakistan will receive six billion dollars under the IMF’s extended fund facility (EFF) adding that the first tranche of the package of one billion dollars already released to Pakistan.

IMF resident representative said the first review of the performance of the economy will be completed before December after which second installment of the package will be released.

She said Pakistan had shared full details of CPEC loans with the IMF, which was mostly private sector investment in energy and infrastructure.

The IMF official said energy projects had helped the country deal with acute shortages of power and this was a positive aspect. She said the debt sustainability analysis showed that CPEC loans were manageable, but the country’s overall debt situation was not sustainable. Responding to a question, Ms Sanchez said fiscal consolidation and revenue mobilisation, market-based exchange rate and social sector protection were three basic pillars of the new IMF programme.

Moreover, a US delegation led by Acting Assistant Secretary of State for the Bureau of South and Central Asian Affairs Alice G. Wells called on Adviser to Prime Minister on Finance and Revenue Abdul Hafeez Shaikh in Islamabad on Tuesday.

During the meeting, he briefed the delegation on the government’s measures to ensure economic discipline and implementation of the FATF action plan and the key challenges it has been facing.

The delegation included US treasury officials comprising Scott Rembrandt, Deputy Assistant Secretary, Grant Vickers, David Galbraith and others. Shaikh emphasised the importance of bilateral engagement with the US and the need to encourage entrepreneurs from the private sector of both countries to enhance trade.

The adviser informed that over the past three months, the government has taken significant steps to bring in financial discipline, including reduction in current account deficit, focus on increasing revenue generation, measures to reduce fiscal expenditures, reduce fiscal borrowings, efforts to enhance foreign exchange reserves through bilateral and multilateral support, and arrangement of petroleum credit facility with Saudi Arabia and the IMF programme.

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