The International Monetary Fund (IMF) has expressed concern over a violation of ongoing performance conditions under the $6 billion Extended Fund Facility (EFF), which required Islamabad not to “impose or strengthen import restrictions for balance of payments objectives.
According to the performance criteria, Pakistan will not impose or increase restrictions on making payments and transfers for current international transactions during the program period, nor will it introduce or modify multiple currency practices (MCPs) other than those arising from the introduction and/or modifications of the multiple-price foreign exchange auction system operating in accordance with IMF staff advice with the goal of supporting flexible market conditions.
The IMF, according to sources, objected to the government’s decision to put a restriction on the import of luxury commodities, although publicly announcing that it would assist decrease the import bill by $4 to $6 billion per year.
The World Trade Organization (WTO) and the International Monetary Fund (IMF) both opposed trade restrictions and trade regime distortions.
Temporary limits on nations experiencing severe balance of payment issues are based on a set of criteria. The IMF also took issue with the government moving forward immediately before planned discussions with the Fund team, preferring to proceed without sufficient consultations.