The hopes for the revival of the International Monetary Fund’s (IMF) program were reignited as the government fulfilled several demands of the lender and made revisions to the budget for the fiscal year 2023-24.
The nation is in desperate need of unlocking the funds before the June 30 deadline for the Extended Fund Facility (EFF), which was agreed upon in 2019. Failure to secure the funds could push Pakistan towards a sovereign default.
Rupees Recovery Against Dollar IMF Deal Impact
If the IMF deal is revived, Pakistan will move one step closer to achieving economic stability.
As a result of the ongoing economic turmoil, the Pakistani rupee experienced a significant decline and reached historic low levels during the past year. The currency depreciated by 28% against the US dollar, with the exchange rate standing at 286 as of June 27, 2023, compared to 204.8 on June 30, 2022.
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A prominent currency dealer in Pakistan has predicted that the rupee could experience a significant recovery if the IMF deal is successfully revived.
In a video message to the media, Malik Bostan, the president of the Exchange Companies Association of Pakistan (ECAP), expressed his expectation that the IMF agreement, if realized, will contribute to a strengthening of the rupee to a level of 270 against the US dollar.
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Nathan Porter, the IMF’s Mission Chief to Pakistan, has stated that discussions are currently taking place with Pakistani authorities “with the aim of quickly reaching an agreement on financial support from the IMF.”
In a statement on Tuesday, Nathan Porter mentioned that “over the past few days, the Pakistani authorities have implemented decisive measures to align policies more closely with the economic reform program.”
Pakistan expressed hope a day earlier that it would receive a decision from the IMF regarding the program within the next day or two.