The International Monetary Fund (IMF) on Tuesday conditionally agreed to Pakistan’s circular debt management plan.
According to sources, the authority expressed conditional readiness to approve Pakistan’s Circular Debt Management Plan, linking its approval to the implementation of a debt servicing surcharge.
Sources revealed that the IMF has demanded that Pakistan impose a DSS of Rs 2.8 per unit on consumers to reduce the circular debt. The government has proposed a plan to reduce the circular debt by Rs 1,250 billion.
To eliminate the circular debt, the government plans to borrow Rs 1,250 billion from banks at an interest rate of 10.8%. The loan will be repaid by imposing a surcharge on consumers, sources added.
