Unconvinced IMF demands another rate hike

The International Monetary Fund (IMF) has not yet been satisfied with Pakistan’s pre-emptive measures which has resulted in another demand of the international lender over increasing interest rates further.

According to media reports, Pakistan and IMF had agreed to increase the interest rate further to satisfy the IMF conditions after the global lender had demanded to increase the interest rate to four percent and Pakistan refused to increase the four percent at one time.

Pakistan assured to fix the interest rate in two installments according to inflation but the IMF also pointed out that the interest rate in Pakistan is low as per inflation.

IMF is pressurizing the government to increase the interest rate by at least another two percent, due to which the SBP will call a meeting of the Monetary Policy Committee (MPC) on April 4 before the schedule in which the interest rate will be reviewed, media reports have claimed..

“The interest rate is likely to increase by another two percent to revive the IMF loan program.” Pakistan also agreed to MEFP four times with the IMF and Pakistan’s staff-level agreement with the IMF was to be signed on February 9.