Aurangzeb says IMF expected to okay bailout package in Sept

ISLAMABAD: Minister for Finance Mohammad Aurangzeb has said the International Monetary Fund (IMF) was expected to approve the next bailout package of $7 billion under the Extended Fund Facility (EFF) by September 2024, as the implementation of all requisites was underway.

However, State Bank of Pakistan (SBP) Governor Jameel Ahmed made all-out efforts to play down the external financing gap that caused the delay in getting approval from the IMF’s Executive Board on the $7 billion bailout package. After the Senate panel meeting, he claimed in front of journalists that all requirements on external financing were fulfilled but failed to explain why the IMF had stopped the approval. When further pressed by journalists, he replied that an agreement with the bilateral donors was that they would grant their confirmation when the maturity of deposits of $12 billion would become due.

The Senate Standing Committee on Finance and Revenue held its meeting under the Chairmanship of Senator Saleem Mandviwalla here at the Parliament House on Wednesday. It was informed that the SBP imposed only Rs208m fine on banks on the charges of money laundering. The Senate rejected the government’s move to grant assent to the Deposit Protection Corporation Amendment Bill 2024 after Senator Farooq H Naek took the stance that the caretaker government could not introduce a legislative bill, so the government should re-introduce this bill. Minister for Finance Mohammad Aurangzeb told the committee that the approval of this bill was part of the structural benchmark under the IMF programme and its approval was required by October 2024. But the committee asked the government to introduce this bill again in any house of parliament.

Ironically, the Senate panel allowed holding proceedings of the committee in camera on two issues including briefing of the FBR chairman on several officers working as OSD for the last two years. Secondly, the issue of detailed briefing on the measures taken by the SBP to avoid money laundering linked with the import of solar panels.

Later, the SBP governor informed the committee that the central bank was reviewing to replace existing currency notes after approval from the federal cabinet by the end of December 2024. The design of currency notes would be changed. Chairman Mandviwalla said that efforts should be aimed at curtailing forged currency notes as the Rs1,000 note was mostly forged.

Senator Mohsin Aziz raised the question of whether the SBP was considering demonetising the Rs5,000 note, the SBP governor replied that there was no such proposal. Senator Mohsin from the PTI stated that the Rs5,000 notes were being used for corruption and it should be done away with to curb corrupt practices.

About the export finance scheme, the committee was told that it would be phased out in five years and shifted to the Exim Bank. So far, the exporters have extended Rs770 billion, out of which 10 per cent was handed over to the Exim Bank. The government further extended Rs230 billion. On the issue of imported consignment of light aliphatic hydrocarbon solvent used for adulteration into POL products, the stakeholders agreed to the imposition of a Rs300,000 penalty on containers for clearance with the condition that this solvent would be used for industrial purposes instead of selling out to petrol pumps.