Bailout agreement: Talks between IMF, Pakistan to continue for second day today

Bailout agreement - Talks between IMF, Pakistan to continue for second day today
Islamabad: The federal government of Pakistan and the International Monetary Fund (IMF) will resume their talks regarding a bailout agreement on Saturday for a second day in Islamabad.

The two sides held talks in the federal capital on Friday, after which the Ministry of Finance said they had made "good progress" in their discussions. "Consultations will continue over the weekend," it added.

Earlier, the Ministry of Finance had informed that package will be worth approximately $6.4 billion dollars.

Under the proposed bailout agreement, Pakistan would have no choice but to concede to the IMF’s demands to hike power tariffs and taxes and withdraw tax concessions and exemptions — which are among the conditions that the country has accepted to secure the loan.

It is also expected that interest rates would be raised to 12 percent with the government also agreeing to not control dollar rates. The government will also inform the IMF of its plans to privatize those state organizations that are currently losing money.

Under the proposed agreement, the government would not control the rate of the dollar, and subsidies in the energy sector, as well as other sectors, would be withdrawn.

Furthermore, the plan to privatise institutions incurring losses would be shared with the IMF.

On Friday, Prime Minister Imran Khan turned down the draft of a staff-level agreement between the Ministry of Finance and IMF.

Prime Minister Imran Khan also expressed reservations over massive additional taxes burden that the nation will bear from July this year, provided both sides reach an agreement.