IMF’s Standby Agreement Stabilization of Pakistan’s Economy۔
Introduction to IMF’s Standby Agreement
IMF’s Standby Agreement Stabilization of Pakistan’s Economy. The IMF deal was supposed to stabilize the Pakistani economy, but unfortunately, if you look at all the debates about this deal, the delay of this deal and some of the previous conditions are a burden on the people.
Stability did not come despite the money received from the IMF
Due to this stability did not come despite the money received from the IMF. The reasons for this are obvious the deal was made during the previous government and there were many conditions which the government could not fulfill. One of the types of disaster was the old contracts that the previous government gave away.
Economic stability and great hope
However, despite the IMF deal and despite the money coming from there. Despite the bad claims of economic stability and great hope. The market has not been stabilized. Although the government is making unremitting efforts. And it is the result of these efforts that the government accepted the strict conditions of the IMF. And is trying to stabilize the country from an economic point of view.
After the IMF Deal
After the deal with the IMF’s Standby Agreement the rupee lost its seventh consecutive loss against the dollar in the Inter-market on Monday and the rupee continued to depreciate against the dollar. Currency dealers say that the local currency is now depreciating without any resistance. The dollar closed at Rs 287.92 in the inter-bank market, while it was up by Rs 1 to Rs 293 in the open market.
After the IMF deal the value of Rupee
After the deal with the IMF, the rupee lost its seventh consecutive loss against the dollar in the Inter-market on Monday and the rupee continued to depreciate against the dollar. Currency dealers say that the local currency is now depreciating without any resistance. The dollar closed at Rs 287.92 in the inter-bank market, while it was up by Rs 1 to Rs 293 in the open market.
The rupee would have recovered instead of falling
Although it should have happened after the IMF deal, the value of the rupee would have recovered instead of falling. But the value of the rupee is continuously falling and the dollar is increasing. However, there is a strong possibility that the benefits resulting from this deal will come out in some time. The latest agreement with IMF was signed on 29th June 2023.
If you look at it, it is named Standby Agreement. A standby agreement means that the IMF-financed country guides the member to use its financial resources and the IMF has access to the member country’s financial resources so that the IMF can monitor the ability of the financed country to repay the loan.
Under constant external pressure
The new standby agreement has given the country’s economy, which was under constant external pressure, some confidence to investors who were afraid of bringing in capital, to provide a clear framework to stabilize the economy from the ongoing macroeconomic stability and bilateral and long-term external shocks, maintain macroeconomic stability and provide a clear framework with long-term financing from multilateral and bilateral partners.
Made a very difficult deal
Made a very difficult deal in a difficult time but saved the country and the country’s rapidly deteriorating economy by taking the right decision in time. The IMF has appreciated the efforts of the Government of Pakistan and supported its immediate efforts. The Standby Agreement will help to meet the needs of the people of Pakistan, it will help to stabilize the country’s income, and improve the country’s income to meet its expenditure and implementation mechanism to meet the cost of social and economic development.
Benefits of this agreement
However, as far as the benefits of this agreement are concerned, although the benefits of this agreement are not yet reaching the people of Pakistan, on the contrary, they are taking this agreement as a burden, but those who have little understanding of the economy are well aware of the need for this agreement and its far-reaching consequences.
A standby agreement where the country provides assistance to the member country in the balance of payments is especially beneficial if the member country owns an emerging market and Pakistan can become a fast-emerging market.
Very strange that despite the agreement with the IMF
It seems very strange that despite the agreement with the IMF, the market is not responding as expected, the market is trending downward. It had been more than a year and a half since the Pakistan dollar had seen a serious decline in the dollar. This serious shortage of dollars was the main problem for Pakistan’s economy, which brought a sovereign country like Pakistan to the brink of default.
Monetary experts who deal with the country’s currency have published negative figures for the country’s currency, according to which the country’s solvency trend is negative. Their frequently published reports indicate a negative trend.
Fiscal year 2024
Pakistan will have to pay around $25 billion in debt in fiscal year 2024. Senior bankers said that due to the November elections this year, there is uncertainty in the market as the market will have to see what steps the incoming government takes for the economy or whether it will continue with the current government’s policies.
Expected General elections
The expected general elections are another reason for volatility and uncertainty in the market. Talking further, bankers said that political uncertainty is now more of a concern than economic uncertainty. And this is likely to affect the economic activities in Pakistan. Amir Aziz, a manufacturer of textile products, says that after the political parties who accuse each other, the public has become suspicious about the general and fair elections, and these doubts and doubts attract the stakeholders to the negative trend.
Domestic and foreign investors
He further said that the situation will not clear until the general elections are held, and until the situation is clear, domestic and foreign investors will be afraid to invest, it will take some time to restore their confidence in the market.
Growth rate projected by the IMF for the fiscal year 2024
And until they contribute to the economy, the country’s economy will remain uncertain. However, traders say that the growth rate project by the IMF for the fiscal year 2024 is so low that it will not bring stability to the economy and the exchange rate or the rupee. Moreover, experts say that this will provide a strong base to push the rupee higher against the dollar. And to bring the rupee up, it is necessary to bring the country’s economy in the right direction. And this is not possible until a strong government and a strong economic policy are follow.