Pak government bypasses IMF rules, takes 239 billion loan from State Bank of Pakistan

Pakistan Economic Crisis: Ignoring the law, the Shahbaz Sharif government of Pakistan has taken a total credit of 239 billion Pakistani rupees (PKR) from its central bank i.e. State Bank of Pakistan in the month of January-February. According to Dawn’s report, the government has taken this credit loan from the central bank so that it can repay its debt to the rest of the country’s commercial banks and meet domestic needs. Significantly, the International Monetary Fund had asked the Government of Pakistan not to take loans from central banks. An amendment was made in the year 2022 to prevent the government from taking credit from the central bank. Even after this, the government has taken a loan from the central bank ignoring the IMF.

Ignoring the rules

According to Section 9C of the Amended Act 2022 on the orders of the International Monetary Fund (IMF), the State Bank of Pakistan cannot, under any circumstances, give direct credit or loan guarantees to the government or any government institution or other public institution. Presenting its quarterly report, Prime Institute, an Islamabad-based think tank, has said that the government has ignored the amendments made by it. year 2023 I have taken a total loan of 239 billion Pakistani rupees from State Bank of Pakistan between January and February. This money has been taken to reduce the fiscal deficit.

Pakistan’s economic condition is very bad

Pakistan has been trying for a long time to get $1.1 billion bailout package from IMF, but even after lakhs of efforts, Shahbaz Sharif government has not been able to get this bailout package. In such a situation, after the government has taken credit from the central bank, the IMF can show strictness in giving bailout package to Pakistan. Significantly, due to lack of foreign exchange reserves in the country, Pakistan is not able to import many essential things.

Due to this, inflation is skyrocketing in the country. The prices of basic food items like flour are skyrocketing in the country. The World Bank has predicted for the financial year 2023-24 that the inflation rate in Pakistan is likely to be 29.5 percent. Inflation can skyrocket in this country due to lack of energy and rising prices of food items.

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