ISLAMABAD: The International Monetary Fund (IMF) has urged Pakistan to allow its currency to appreciate in value in the face of tougher currency controls in the nation, which have led to the emergence of a black market for dollars and discouraged foreign investment through official channels.
Islamabad has not agreed with the IMF’s position, citing the State Bank of Pakistan’s (SBP) refusal to use holy currency in the interbank market.
According to sources, IMF Mission Chief to Pakistan Nathan Porter encouraged the government to implement the market-based currency rate at a meeting with Finance Minister Ishaq Dar on Thursday.
They continued by saying that the IMF had strong suspicions that the Pakistani government was manipulating the exchange rate by exerting administrative pressure on banks and currency traders.
According to the sources, Dar disagreed with the IMF’s assertion that the government had any influence on the currency rate.
Due to differences of opinion about the currency rate strategy as well as problems with the electricity sector, the meeting between Dar and Porter did not provide a resolution.
Even though the country’s foreign exchange reserves dropped to a dangerously low $6 billion as of December 21, the rupee only slightly lost value on Friday, falling to Rs225.64 to a dollar.