No more war impact, govt tells IMF

According to The Express Tribune, the federal government has assured the IMF that regional tensions in the Middle East no longer weigh on the economy. Authorities expect inflation to ease to 7.5% while the external sector stays stable. The global lender, however, has urged changes to exchange rate and interest rate policies.

The government told the fund that exports could reach $34 billion and remittances $45.5 billion this fiscal year, both above budget targets. The current account deficit is now seen between $2.5 billion and $3 billion, well below the $3.6 billion budget goal. Imports are projected at $69-70 billion, in line with the annual target.

The central bank also forecast slowing inflation and a steady exchange rate, and told the IMF its 11.5% policy rate was already tight enough. The rupee held near Rs278 to the dollar in the first quarter, stronger than the Rs286 budget assumption. Sources said the IMF's detailed response is expected within days and that the lender again pressed for a market-based exchange rate and tighter monetary policy.