The Finance Minister has announced that following the completion of all prerequisites outlined by the International Monetary Fund for the revival of the $7 billion bailout program, the Board of China Development Bank (CDB) has approved a $700 million credit facility for Pakistan. The government hopes to receive additional inflows from other multilateral lenders and friendly countries.
According to Mr. Dar, the funds are expected to be received this week and will bolster the State Bank of Pakistan’s (SBP) foreign exchange reserves, which have decreased to $3 billion, insufficient to cover even three weeks of regulated imports.
Pakistan needs to increase its foreign exchange reserves to a minimum of $10 billion to cover the cost of imports for two months. The country anticipates receiving inflows from China, Saudi Arabia, and the UAE soon after the staff-level agreement is signed with the International Monetary Fund (IMF).
According to a reliable source, Pakistan and the IMF are scheduled to sign the staff-level agreement on February 28, followed by an IMF executive board meeting in the first week of March.
In accordance with the final condition of the IMF, the Finance (Supplementary) Bill 2023 was sent by the Prime Minister’s Secretariat to the President’s Secretariat for approval on Wednesday evening. However, the bill was sent two days late after being passed by the National Assembly on February 20
According to Article 75(1) of the Constitution, the President of Pakistan does not have the authority to reject or object to the finance bill, which is considered a money bill.
The article states that “When a bill is presented to the President for assent, the President shall, within ten days, either (a) assent to the Bill; or (b) in the case of a bill other than a Money Bill, return the Bill to the Majlis-e-Shoora (Parliament) with a message requesting that the Bill or any specified provision thereof be reconsidered, and that any amendment specified in the message be considered.”
In other news, US Ambassador to Pakistan, Donald Blome, met with Finance Minister Ishaq Dar on Wednesday.
H.E. Mr. Donald Blome, Ambassador of the United States of America to Pakistan called on Finance Minister Senator Mohammad Ishaq Dar and exchanged views on further promoting bilateral economic, investment and trade relations between the two countries.
— Ministry of Finance, Government of Pakistan (@Financegovpk) February 22, 2023pic.twitter.com/0RjYxu7Xo8
According to an official announcement, Mr Blome, the US Ambassador to Pakistan, expressed his confidence in the Pakistani government’s policies and programs for economic sustainability and socio-economic development. He also expressed his support for further promoting bilateral economic, investment, and trade relations between the two countries. In response, Finance Minister Ishaq Dar thanked the ambassador and reiterated his government’s desire to deepen bilateral trade and investment ties with the United States. The two sides also discussed common interests and ways to enhance bilateral relations.
On Feb 14, two notifications were issued by the government, implementing Rs115bn worth of taxes, prior to the presentation of the bill in the parliament on Feb 15. After President Arif Alvi’s formal assent, the remaining Rs55bn tax measures will come into effect. The Federal Board of Revenue (FBR) will raise the general sales tax from 17pc to 25pc on over 800 items, primarily non-essential imported items such as food and cosmetics. The FBR will issue SROs to implement the remaining measures. The finance bill introduced a new clause that empowers the federal government (cabinet) to charge higher GST rates on goods at the retail level (Third schedule) without parliament approval, a power that was previously held by the parliament.
