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IMF loan at risk after PM’s decision to keep fuel prices unchanged

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April 16, 2022 (MLN): Pakistan’s new government has kept fuel prices unchanged which may continue to put the nation’s critical $6 billion loan program lifeline at risk, as reported by Bloomberg.

In order to provide relief to the common man, Prime Minister Shehbaz Sharif’s administration left gasoline prices at 149.86 rupees a liter and diesel at 144.15 rupees a liter, the finance ministry said on Friday.

The new regime replaced Imran Khan’s government this week which put the loan agreement into jeopardy by unexpectedly reducing prices and capping it till June despite an agreement with the IMF for the opposite.

The report further added that the South Asian nation’s delayed loan program is seen as the most immediate challenge for the incoming government. The nation’s foreign exchange reserves have dropped to less than two months of imports and the rupee fell to a record low this month before recovering this week. About half of the IMF program’s $3 billion is scheduled to be released this year.

The decision takes the nation “further away from IMF’s targets,” Amreen Soorani, head of research at JS Global Capital Ltd. said before the decision. This is a “bit of a concern.”

The new government team wants to work with the IMF to stabilize the economy and will speak to the lender to resume the program, Miftah Ismail, an economic aide to the Prime Minister said this week.

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Posted on: 2022-04-16T12:31:12+05:00

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