In a massive blow for Pakistan, facing severe financial woes, the International Monetary Fund (IMF) has rejected Islamabad’s request to keep the door open for borrowing from the central bank. Headquartered in Washington, the international financial institution also did not agree on meaningful accountability of the State Bank of Pakistan, reported ANI, quoting The Express Tribune.
The Pakistani daily reported that the central bank’s profit would not be transferred to the federal government until the State Bank of Pakistan gets cover to back its monetary liabilities. The report added that at least 20 per cent of the state bank’s profit would henceforth remain in the central bank’s coffers until the desired cover is obtained.
Moreover, the International Monetary Fund also rejected Islamabad’s proposal to borrow up to 2 per cent of its GDP in a financial year. The Pakistan government believes that it has the constitutional right to take loans to fund its operations, and yet IMF has rejected its borrowing request. The Pakistan cabinet has reportedly agreed to permanently close the door for the country to borrow from the state bank under the IMF programme until September next year.