ISLAMABAD: The International Monetary Fund (IMF) has demanded cash-strapped Pakistan to boost its revenue generation by imposing further taxes in order to secure the ninth tranche of the $7 billion loan programme stalled since September last.
It emerged after a round of technical talks between the Pakistani authorities and the IMF delegation, which is visiting Pakistan for the ninth review under the Extended Fund Facility (EFF), concluded on Friday.
The South Asian country is reeling from economic instability due to sharp decline in foreign exchange reserves which are barely enough to cover less than one-month import. Fresh statistics show the reserves held by the State Bank of Pakistan (SBP) dropped to a precariously low level of $3.09 billion in the week ending on Jan 27 owing to external debt repayments.
Reserves held by commercial banks stood at $5.65bn, taking the country’s total liquid reserves to $8.74bn, the central bank said.
Amid the gloomy economic situation, the government is scrambling to revive the IMF’s loan programme. It has also expressed commitment to meet the conditions of the global lender. The recent nosedive in the value of the local currency against the dollar is an outcome of the implementation of the IMF condition regarding removal of cap on the currency exchange rate.