IMF agreement will bring stability in Pakistan: Moody’s

ISLAMABAD: Moody’s Investors Service, a global financial research and rating agency, has said that $3 billion agreement between Pakistan and the International Monetary Fund (IMF) will bring stability in the country.

The agency said that the stand-by arrangement would result in moderate improvement in Pakistan’s financial capacity. It said that the country will have to undertake tax reforms and increase its revenues for long-term stability.

According to Moody’s, Pakistan’s economic activities will be affected in the near future, skyrocketing interest rates and inflation. It said that government expenditures will continue to impact the investment.

According to the IMF statement, the agreement clinched on June 30, will reduce the pressure on Pakistan’s external payments and improve the provision of funds for social sectors and increased revenues.

The IMF said that increased tax revenues will allow for greater funding for the welfare and development leading to financial discipline in Pakistan. The agreement will also ensure energy reforms and establish exchange rates based on market considerations.