Pakistan accepts another condition of the IMF, loan interest rate to go up

Islamabad: Pakistan is likely to raise policy interest by two percent as part of satisfying another condition set by International Monetary Fund (IMF) to release of USD 1.1 funding.

Islamabad is desperately looking for funds to shore up its fragile economy just as prices of essential items are shooting through the roof.

Meanwhile, the ninth review of the IMF bailout package of USD 6.5 billion concluded without arriving at a staff-level agreement.

The Pakistani government is reportedly in the hope of convincing the IMF about implementing the conditions gradually.

The Express Tribune reported that Pakistan agreed to increase the policy interest rate from current 17 per cent by two per cent or 200 basis points, according to NDTV.

Pakistan's latest move to please IMF will push interest rate to 19 per cent which is just a few points below the previous record of 19.5 per cent in 1996.

The discussion between the Pakistan authorities and IMF officials has reached the final stage focusing on the power sector.

Meanwhile, as part of austerity measures, Pakistan Prime Minister Shehbaz Sharif on February 22 directed the Ministry of Foreign Affairs to slash foreign missions, according to Geo News.

Austerity measures include cutting foreign missions abroad, their offices, staff to reduce expenditure by15 per cent.

Meanwhile reports said the prime minister is set to constitute a National Austerity Committee (NAC).