Gold prices dip in international market,

Pakistan shares further $3bn external financing plan with IMF

Islamabad_Pakistan on Tuesday briefs IMF on additional financing plan of $3 billion from Saudi Arabia and UAE Pakistani Rupee continued its upward trend against the US Dollar in the interbank trading at the closing time of the Tuesday.

The new price of the local unit reached Rs284.92 after gaining 81 paisas against the American currency.

On Monday US dollar thrashed Pakistani Rupee in interbank trade on first day of the business week to settle at Rs284.71 after gaining 31 paisas against the local unit Pakistani Rupee.

The Pakistan government has shared a financing plan for another Rs3 billion with the International Monetary Fund, as reportedly, there is a possibility of receiving funds from commercial banks, including World Bank and the Asian Infrastructure Bank.

In a possible development in the signing of a staff-level agreement between Pakistan and the IMF, the government has shared with the foreign lender a financing plan for another Rs3 billion, sources in the Ministry of Finance said.

Interbank closing #ExchangeRate for todayhttps://t.co/JXY6kw8YvA pic.twitter.com/W38cfIp4bc

— SBP (@StateBank_Pak) April 17, 2023

On Monday, the Pakistani rupee ended its three-session winning streak against the US dollar as the local currency depreciated by 0.11% in the interbank market. The rupee settled at 284.71, a decrease of 31 paisas.News of a $2 billion inflow from Saudi Arabia and another $1 billion from the UAE had helped market sentiment with the rupee settling at 284.4 on Friday last. These assurances of funds from friendly countries were seen as crucial for the revival of the International Monetary Fund (IMF) bailout programme.

The price of 24-Karat gold in the domestic market has been skyrocketed per tola price decreased by Rs300 to settle at Rs217400 on Tuesday.

All Sindh Sarafa Jewellers Association said price of 10-gram of 24 Karat reached Rs186385 after losing Rs257.

Gold price in global market
The price of gold per ounce in the international market has been decreases by $3 and global value per ounce of gold reached $2005

However, on Saturday, the IMF said it is still looking forward to obtaining more necessary financing assurances as soon as possible to pave the way for the successful completion of the 9th Extended Fund Facility (EFF) review. Its statement implied that the staff-level agreement could still be a few steps away.

The agreement is critical to providing much-needed stability to the Pakistan’s currency market that has seen the rupee undergo volatile rides in recent months.

Meanwhile,

The federal government has shared a plan for external financing of additional $3 billion with the International Monetary Fund (IMF) in a bid to revive the bailout programme stalled since November last.

One of the requirements under the Memorandum of Economic and Financial Policies (MEFP) between the IMF and Pakistan is related to the Net International Reserves (NIR), which can only by fulfilled after getting assurance from friendly countries to fund a balance of payment gap. Pakistan has assured the IMF that it would raise its dwindling foreign exchange reserves to $10 billion by the end of June.

The global lender wants Pakistan to get the assurance for $6 billion to fund this fiscal year’s balance of payments gap and avoid default.

Last week, the IMF welcomed the financial assurances from the United Arab Emirates and Saudi Arabia but it asked Pakistan to do more for external financing as the pledges were short of requirements.

Sources said the cash-strapped country had now informed the IMF that it was expecting $1 billion funds from the World Bank, Asia Infrastructure Bank and other commercial banks.

It was told that Pakistan would receive $450 million in wake of second Resilient Institutions for Sustainable Economy (RISE-II) budget support loan. The IMF was also informed that Pakistan was expected to receive funds committed by the international community at the Geneva moot.

Pakistan’s loan programme is yet to materialize months after it imposed additional taxes and increased energy prices and allowed free floating of currency to meet conditions laid forth by the IMF. The nation has missed multiple deadlines to revive the deal.

The economic turmoil could worsen if the IMF bailout is delayed further as foreign exchange reserves continue to deplete. Total foreign reserves stand at $9.82 billion with the State Bank of Pakistan holding only $4.24 billion, which is barely enough to cover three weeks of imports.