IMF staff-level agreement a credit positive for Pakistan: Moody's

News Image

MG News | July 18, 2022 at 06:39 PM GMT+05:00

0:00

July 18, 2022 (MLN): Moody’s Investors Service on Monday termed the IMF's staff-level agreement with Pakistan, a credit positive as it will ease pressure on the country’s foreign exchange reserves.

“The agreement is credit positive for Pakistan because it paves the way for the release of $1.2 billion in IMF financing at a time when its foreign exchange reserves are under significant pressure”, Moody’s said.

To recall, last week IMF and Pakistani authorities reached and staff level agreement to complete the combined seventh and eighth reviews of the Extended Fund Facility (EFF). The IMF Board said that it will consider an extension of the EFF until end-June 2023 and an augmentation of access by SDR 720 million which will bring the total access under the EFF to about $7 billion.

The report said that through the IMF loan, new doors will open for the additional funding from the other Multilateral and bilateral partners.

Moody’s concern was stated as “However, we expect the deficit to narrow to 3.5%-4% of GDP in fiscal year 2023 from 4.5%-5% in fiscal 2022 as imports moderate amid slowing growth and measures to curb nonessential imports,” said Moody’s

Furthermore, the agency is excepting Pakistan’s  Financing needs to remain high amid continued high global commodity prices and the need to repay external debt.

Moody’s said that though the Chinese State bank Loan of $2.3 billion country’s foreign exchange reserves are expected to increase slightly in June.

The agency is hopeful that Pakistan will get approval for $1.2 billion in the third quarter of this year. But want Pakistan to maintain its engagement with the IMF and improve its focuses on policy priorities, implementing the fiscal 2023 budget, by making progress and development in the power sector, tackling inflation, reducing poverty, enhancing governance and taking a step against corruption.

“The government may also find it difficult to continually enact revenue-raising reforms, such as steadily increasing petroleum levies and raising power tariffs, particularly in the run-up to the next general elections scheduled for mid-2023,” said Moody’s.

 

Copyright Mettis Link News

Related News

Name Price/Vol %Chg/NChg
KSE100 148,617.78
624.60M
0.86%
1274.27
ALLSHR 91,685.08
1,340.28M
0.74%
669.39
KSE30 45,247.79
197.43M
0.83%
370.74
KMI30 212,370.79
224.51M
1.05%
2209.48
KMIALLSHR 61,227.89
711.87M
1.18%
715.56
BKTi 41,264.02
160.39M
0.54%
221.73
OGTi 30,019.10
23.63M
0.64%
190.41
Symbol Bid/Ask High/Low
Name Last High/Low Chg/%Chg
BITCOIN FUTURES 108,265.00 0.00
0.00
-510.00
-0.47%
BRENT CRUDE 67.46 67.94
67.29
-0.52
-0.76%
RICHARDS BAY COAL MONTHLY 88.70 88.70
88.70
-0.75
-0.84%
ROTTERDAM COAL MONTHLY 96.15 96.75
96.00
-0.40
-0.41%
USD RBD PALM OLEIN 1,106.50 1,106.50
1,106.50
0.00
0.00%
CRUDE OIL - WTI 64.01 0.00
0.00
0.00
0.00%
SUGAR #11 WORLD 16.34 16.52
16.33
-0.14
-0.85%

Chart of the Day


Latest News
August 31, 2025 at 07:00 PM GMT+05:00

Weekly Market Roundup


August 30, 2025 at 04:28 PM GMT+05:00

Key Pakistan Market Stats and Economic Indicators


August 29, 2025 at 06:04 PM GMT+05:00

SCRA inflows offset Rs8.5bn net selling



Top 5 things to watch in this week

Pakistan Stock Movers
Name Last Chg/%Chg
Name Last Chg/%Chg