IMF representative rules out dictation on SBP autonomy

ISLAMABAD: The IMF is not dictating Pakistan on the autonomy of the SBP, said IMF Resident Representative to Pakistan, Teresa Daban Sanchez on Wednesday.
Speaking at a webinar, Sanchez said that the IMF wants Pakistan to reform state-run institutions to strengthen them and enhance transparency.
She said that Pakistan’s economy was on the right track before Covid-19. The country could get more funding following the surfacing of the third wave of corona as uncertainty in the global arena is one of the biggest challenges for Pakistan, she said.
She said that the IMF approved a US$6 billion 39-month extended fund facility (EFF) arrangement for Pakistan to reduce economic vulnerabilities and generate sustainable and balanced growth.
Talking about Pakistan’s fiscal consolidation, she said that IMF wants tax reforms in Pakistan to achieve the fiscal objectives. She said the country should reduce subsidies or incentives on taxes. For economic sustainability, Pakistan has to broaden the tax base and raise tax revenue in a well-balanced and equitable manner while halting tax evasion, she said.
She said that rupee should strengthen against the dollar, underscoring that a flexible market-determined exchange rate helps in correcting imbalances. She appreciated Pakistan’s efforts to comply with Financial Action Task Force (FATF) conditions. The country needs to take more steps to curb money laundering to improve the business climate, she added.
To eliminate quasi-fiscal losses in the energy sector, the IMF resident representative emphasised curbing circular debt. It is pertinent to note that Pakistan’s Debt and guarantees have reached 92.8 percent of the GDP. – TLTP