The information below has become available following the issuance of the staff report. It does not alter the thrust of the staff appraisal.
1. The authorities are requesting approval for temporary retention of exchange restrictions and a multiple currency practice (MCP) under Article VIII. These import restrictions and the MCP, which are subject to approval under Article VIII of the IMF’s Articles of Agreement, were introduced to support the balance of payments at a time of heightened volatility. Specifically, Pakistan maintains (i) a requirement to fully pre-fund letters of credit, imposed in early 2017; and (ii) an exchange restrictions on advance payment for imports against letters of credit, imposed in July 2018. The authorities are committed to phase them out as the balance of payments stabilizes and to eliminate them by the end of the program.
Staff supports the authorities’ request for approval of the retention of the exchange restrictions and the MCP for a period of 12 months on the grounds that they are non-discriminatory, imposed for balance of payments reasons, and temporary.