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Peso Set Free: Argentina Makes Bold Economic Shift With IMF Support

April 12, 2025, 9:15 am

Argentina took major steps to fix its economy on Friday. It removed key currency controls and loosened its hold on the peso. These changes came after the country signed a $20 billion agreement with the International Monetary Fund (IMF).

IMF deal brings immediate money

Under this 48-month Extended Fund Facility, Argentina will receive $12 billion right away. Additionally, the IMF will conduct the first review in June. If that review goes well, Argentina will get another $2 billion.

Peso to trade within a wider range

Meanwhile, the central bank announced a big policy shift. Starting Monday, it will remove the fixed exchange rate. As a result, the peso will float between 1,000 and 1,400 pesos per U.S. dollar. On Friday, it closed at 1,074 per dollar.

Country removes major capital controls

Furthermore, the central bank said it will scrap most parts of the “cepo” system. These strict capital controls had limited access to foreign currency for years. From now on, companies can send their profits outside Argentina. This change meets a key demand from investors. In turn, it could attract more foreign investment.

Economy Minister confirms the reforms

Later, Economy Minister Luis Caputo spoke about these changes at a press briefing. He said, “As of Monday, we will be able to put an end to the foreign exchange restrictions which were imposed in 2019 and which limit the normal functioning of the economy.”

IMF Approves $1.2 Billion For Egypt, Unlocks Additional $1.3 Billion Under New Facility

March 12, 2025, 2:32 am

The International Monetary Fund (IMF) has approved a $1.2 billion payment to Egypt after the successful completion of the fourth review of Egypt’s $8 billion economic reform program.

Moreover, the IMF executive board also provided Egypt with access to around $1.3 billion through the Resilience and Sustainability Facility (RSF), based on a statement that was issued by the lender. Egypt requested funding via the RSF since 2022 as it sought to get up to another $1 billion.

The news arrives as Egypt witnesses a steep decline in inflation, partly attributed to financial reforms that have been rolled out under the IMF-supported program. Official statistics indicated that urban consumer price inflation on an annual basis dropped steeply from 24.0% in January to 12.8% in February. Core inflation also plummeted, declining from 22.6% to 10% year-on-year.

Market commentators and economists foresee that, driven by the IMF deal and highest-ever investments of the United Arab Emirates, international investors will have no hesitation rolling over their position in Egyptian government bonds.

Egypt has been battling economic issues, such as runaway inflation and a chronic shortage of foreign currency. Egypt signed an extended IMF program in March 2024 to stem these issues. Adding to its financial woes on top of that, a dramatic fall in Suez Canal revenue resulting from regional instability has placed further economic pressure in the last year.

The IMF financing and foreign investments are likely to be the key lifeline as Egypt keeps pursuing economic reforms to stabilize its economy.

Sri Lanka President Pledges to Eradicate Corruption on Independence Anniversary

February 4, 2025, 3:19 pm

Leftist President of Sri Lanka, Anura Kumara Dissanayake marked the country’s independence anniversary on Tuesday with a strong pledge to change its global image from a corrupt nation to one of transparency and integrity.

Unlike past celebrations featuring extravagant military displays, Dissanayake opted for a modest military march, fulfilling his commitment to reducing government expenses. “We are committed to transforming Sri Lanka’s global image from a country known for corrupt governance,” he stated in his national address.

He acknowledged past governance failures but emphasized that his administration, built by the collective will of citizens, is making steady progress despite challenges.

Economic Stability and Debt Restructuring

Sri Lanka successfully concluded a long-delayed debt restructuring last year, ending its status as a bankrupt nation. The country had defaulted on its $46 billion external debt in April 2022, triggering a severe economic crisis that led to the resignation of former president Gotabaya Rajapaksa.

His successor, Ranil Wickremesinghe, secured a $2.9 billion bailout from the International Monetary Fund (IMF). Dissanayake, who defeated Wickremesinghe in last September’s elections, has upheld austerity measures and vowed to continue the four-year IMF bailout program.

New Political Culture in Sri Lanka

“As the new government, over the past four months, we have laid the foundation for a stable economy and introduced a new political culture,” Dissanayake affirmed.

His administration’s focus on economic reform and governance transparency aims to restore confidence in Sri Lanka’s future.

IMF Approves Third Review Of Sri Lanka’s $2.9bn Bailout As Economy Shows Recovery

November 23, 2024, 4:11 pm

International Monetary Fund (IMF) has approved the third review of Sri Lanka’s $2.9 billion bailout on Saturday, acknowledging signs of economic recovery but warning that the country’s economy remains vulnerable. In a statement, the global lender confirmed it would release an additional $333 million, bringing the total funding to approximately $1.3 billion, to support the crisis-hit nation.

However, the IMF emphasized that Sri Lanka must complete a debt restructuring process involving $12.5 billion in bonds and another $10 billion with bilateral creditors, including Japan, China, and India, for the bailout program to continue. The IMF’s support, which began in March 2023, has played a key role in stabilizing the economy after Sri Lanka faced its worst financial crisis in more than seven decades in 2022.

Peter Breuer, IMF Senior Mission Chief, highlighted that meeting tax revenue goals and continuing reforms of state-owned enterprises will be crucial for Sri Lanka to achieve its primary surplus target of 2.3% of gross domestic product next year. Breuer also noted that the Sri Lankan authorities have committed to adhering to the program’s guidelines, and once a package is submitted to parliament, the IMF can proceed with the fourth review.

Sri Lanka’s President Anura Kumara Dissanayake announced that an interim budget would be presented to parliament in December, and he aims to complete the debt restructuring by the end of the month.

The country has made significant progress since the crisis, which saw inflation soar to 70% and the economy contract by 7.3% in the worst phase. However, recent months have shown improvement, with the Sri Lankan rupee rising 11.3% and inflation subsiding, with prices falling by 0.8% last month.

According to the World Bank, Sri Lanka’s economy is projected to grow by 4.4% this year, marking the first economic expansion in three years. Despite this positive outlook, challenges remain, and Sri Lanka’s long-term recovery will depend on successfully managing its debt and continuing fiscal reforms.

Global Economic Turmoil: Nations Struggle Amid Debt Crises And Recovery Efforts

October 5, 2024, 6:46 pm

Several countries are grappling with severe economic challenges as they navigate debt crises and seek recovery. While some nations, like Sri Lanka, show signs of stabilization, others, including Pakistan and Venezuela, continue to face significant hurdles.

Pakistan is on shaky ground despite securing a $3 billion International Monetary Fund (IMF) bailout that prevented immediate bankruptcy. The country is now negotiating a new multi-year loan of $7 billion, which pales in comparison to the estimated $123 billion in external financing needed by 2029. As Pakistan’s GDP fell to $374.904 billion in 2023-24, inflation rose to 9.6% in August, causing further hardship for its citizens. Although forex reserves recently surpassed $10 billion, they are insufficient to cover even three months of imports.

Sri Lanka, which defaulted on its $83 billion debt in April 2022, the economy is recovering, with forex reserves now at $5.95 billion its highest in three years. Inflation has dramatically decreased from 67% in September 2022 to just 1.1% in August 2024. However, rising poverty and debt obligations pose risks to its recovery, despite reaching a deal with creditors to restructure $12.5 billion in debt.

Bangladesh is also facing economic difficulties, with total debt rising to $156 billion. Although the country is not in a full-blown crisis, its forex reserves have dropped from $32 billion in January 2023 to $20 billion in September 2024, and inflation is projected to rise due to high food prices.

Venezuela, ongoing political turmoil and a history of defaulting on debt since 2017 have left the nation with a staggering $154 billion in debt. Despite a recent 5% economic expansion, 82% of the population lives in poverty.

Argentina has defaulted on its sovereign debt three times in the 21st century, accumulating over $400 billion in obligations. Although recent reforms have reduced inflation, poverty remains high at 52.9%, and the country faces a potential default in the next few years.

Zambia, which defaulted on Eurobond debt in 2020, recently restructured its $6.3 billion external debt but still faces challenges, including the need to restructure $3.3 billion in commercial loans.

Lastly, Ghana defaulted on most external debts in December 2022 but has begun to recover, with a recent debt restructuring deal in place that will see lenders take a 40% loss on their investments.

As these nations confront their economic challenges, the situation remains fluid, and international support may be crucial for their recovery.

BRICS Advocates for Increased Use of Local Currencies in Member Trade

June 11, 2024, 8:09 am

The BRICS Foreign Ministers convened in Nizhny Novgorod, Russia, on Monday to discuss various topics, notably the increased use of local currencies in trade and financial transactions among BRICS countries. They acknowledged the necessity for a comprehensive overhaul of the global financial system.

“They recalled paragraph 45 of the Johannesburg II Declaration, tasking the Finance Ministers and Central Bank Governors of the BRICS countries to consider the issue of local currencies, payment instruments, and platforms, and to report back to the BRICS Leaders,” stated the Joint Statement.

The ministers also emphasized the demand made at COP27 for reforming international financial institutions to expand financing and simplify access to resources. They expressed optimism that the 2025 International Bank for Reconstruction and Development shareholder review would be highly successful.

According to the Joint Statement released by the Ministry of External Affairs (MEA), the leaders supported a robust Global Financial Safety Net with a strong quota-based and adequately resourced International Monetary Fund (IMF) at its center. They also called for “continuing the process of IMF governance reform, including creating a new quota formula reflecting the economic size of its membership” during the overall review of quotas.

The ministers emphasized the necessity of reforming the policies and practices of multilateral development banks (MDBs) to increase their lending capacities, better assisting developing countries in financing their development needs and enhancing their climate action, in line with the Sharm El-Sheikh Action Plan of COP27.

India participated in the BRICS Foreign Ministers’ Meeting in Nizhny Novgorod, marking the first foreign policy assignment under Prime Minister Narendra Modi’s third consecutive term. The Indian delegation was led by Dammu Ravi, Secretary (Economic Relations) at the Ministry of External Affairs.

“The Ministers encouraged the New Development Bank to follow the member-led and demand-driven principle, employ innovative financing mechanisms to mobilize financing from diversified sources, enhance capacity building and knowledge exchange, assist member countries in achieving the SDGs, and further improve efficiency and effectiveness to fulfill its mandate,” read the Joint Statement.

They agreed to develop the New Development Bank into a 21st-century Multilateral Development Bank and urged it to execute its functions fairly in accordance with the Agreement on the New Development Bank.

“The Ministers expressed their support for the further expansion of the NDB membership and early consideration of applications from BRICS Member countries as per the NDB approved policies,” the statement added.

Additionally, the ministers expressed their intention to promote energy cooperation among BRICS countries. They called for resilient global supply chains to ensure universal access to affordable, accessible, reliable, sustainable, and modern energy sources.

The ministers recalled their national positions regarding the situation in and around Ukraine as expressed in various forums, including the UN Security Council and UN General Assembly. “They noted with appreciation relevant proposals of mediation and good offices aimed at peaceful resolution of the conflict through dialogue and diplomacy,” the statement read.

The ministers expressed serious concern over ongoing conflicts in the Middle East and North Africa (MENA) region and referenced the Joint Statement by BRICS Deputy Foreign Ministers and Special Envoys from their April 25, 2024, meeting.

Russian Foreign Minister Sergey Lavrov opened the BRICS Ministerial with a minute of silence in memory of the deceased former Iran President Ebrahim Raisi and Iranian Foreign Minister Hossein Amir-Abdollahian, offering condolences to the people of Iran and the families of the victims.

This meeting marks the first of foreign ministers since the BRICS expansion in 2023, with new members Egypt, Iran, UAE, Saudi Arabia, and Ethiopia joining the grouping. Russia assumed the BRICS chairmanship on January 1, 2024.

IMF Asks Pakistan to ‘Impose’ Tax on Monthly Pensions

May 20, 2024, 12:34 pm

The International Monetary Fund (IMF) mission has reportedly urged Pakistani authorities to implement a tax on monthly pensions exceeding Rs 100,000, as per ARY News sources. Additionally, the IMF is pressing for pension reforms as part of the “new bailout program,” with policy discussions set to commence soon as negotiations between Pakistan and the IMF approach their final stages.

The IMF has emphasised that a tax on monthly pensions above Rs 100,000 is one of the main components of the proposed loan programme. According to ARY News, it is expected that this legislative demand—which aims to tax wealthy pensioners—will be granted.

As discussions between Pakistan and the IMF continue, it is clear that the new rescue plan would include strict economic measures. Pakistan isn’t planning to look for another loan programme; it’s still committed to the IMF loan programme.

To qualify for the “new bailout program,” Pakistan will need to exercise fiscal discipline by reducing spending and deficits in accordance with IMF guidelines, as per sources.

Recently, the IMF mission proposed an increase in the general sales tax (GST) to 18 percent, as reported by ARY News. This demand was raised during multiple rounds of discussions between Pakistani authorities and the IMF for a fresh loan.

Sales tax collection in Pakistan is currently handled by both the national and provincial governments. The IMF mission outlined problems with this system and recommended that the federal government take complete responsibility for it. In addition, the IMF suggested hiking the tax to 18 percent on goods and services and terminating the GST exemptions.

The creation of a distinct regulatory agency and changes to the insurance industry were additional demands made by the IMF during the fourth round of negotiations. The fund also suggested three state-owned insurance companies be privatised.

Presently, an IMF delegation is in Pakistan, as the country seeks another program from the global lender to address its financial crisis.

Pakistan’s SBP Receives $1.1 Billion IMF Funding

May 1, 2024, 12:10 am

The State Bank of Pakistan (SBP) has received approximately USD 1.1 billion from the International Monetary Fund (IMF), following the approval of the final tranche of Pakistan’s USD 3 billion Stand-By Arrangement (SBA) by the global lender, Geo News said.

Pakistan announced on Tuesday that the IMF’s executive board approved a USD 1.1 billion loan tranche, marking the completion of the second bailout package. The funds are expected to be included in the SBP’s foreign exchange reserves for the week ending on May 3.

This latest disbursement represents the third and final segment of a USD 3 billion standby arrangement with the IMF, crucial for Pakistan to avert a sovereign default, especially with the existing arrangement set to conclude this month. The SBP reported last week that its foreign exchange reserves declined by USD 74 million to USD 7.981 billion for the week ending April 19 due to external debt repayments. Additionally, Geo News reported that the country’s foreign reserves dropped by USD 93 million to USD 13.281 billion.

As per the SBP, the reserves of commercial banks witnessed a decrease of USD 20 million, reaching USD 5.299 billion. On Monday, the IMF issued a statement confirming the completion of the second and final review of Pakistan’s economic reform program supported by the SBA.

“The board’s decision allows for an immediate disbursement of SDR 828 million (around USD 1.1 billion), bringing total disbursements under the arrangement to SDR 2.250 billion (about USD 3 billion).”

This marks the third and final installment of a USD 3 billion SBA with the IMF, obtained by Pakistan last summer to prevent a sovereign default, as per Geo News. Looking forward, Pakistan is aiming for a new, larger IMF loan with an extended duration. Finance Minister Muhammad Aurangzeb has suggested that Islamabad could reach a staff-level agreement on the new program as soon as July.

The emphasis is on obtaining a loan spanning at least three years to strengthen macroeconomic stability and enact essential structural reforms. However, the precise size of the program has not been disclosed.

IMF, the global lender, stated that the nine-month SBA, sanctioned by the executive board on July 12 of last year, effectively served as a policy anchor to tackle domestic and external imbalances. It also provided a framework for financial assistance from multilateral and bilateral partners.

IMF Approves Final $1.1 Billion Installment as Pakistan’s Assistance Plan

April 30, 2024, 10:08 am

The executive board of the International Monetary Fund approved $1.1 billion in cash for Pakistan, according to a press statement, but talks for a fresh loan are still ongoing.

A $3 billion standby agreement with the IMF was secured by Islamabad last summer in order to avert a sovereign default. This funding is the second and last part of that agreement.

After meeting with IMF Managing Director Kristalina Georgieva on the fringes of the World Economic Forum in Riyadh, Pakistani Prime Minister Shehbaz Sharif gave his consent.

The existing standby deal between Pakistan and the IMF expires this month, thus Pakistan is pursuing a new, larger, longer-term accord known as the Extended Fund Facility (EFF). Islamabad might come to a staff-level consensus on the new program by the beginning of July, according to Finance Minister Muhammad Aurangzeb’s comments.

The aim of Islamabad’s efforts is to secure a loan spanning at least three years to achieve macroeconomic stability and implement long-overdue and challenging structural reforms.

While Aurangzeb has refrained from disclosing the exact amount being sought, discussions between the Fund and the government are already underway, although a formal request from Islamabad is yet to be made.

If successful, this would mark Pakistan’s 24th IMF bailout.

The $350 billion economy is grappling with a persistent balance of payments crisis, facing nearly $24 billion in debt and interest repayments in the upcoming fiscal year—three times the amount of its central bank’s foreign currency reserves.

JPMorgan Chase CEO Jamie Dimon Lauds PM Modi’s Leadership

April 24, 2024, 3:36 pm

Jamie Dimon, the Chairman and CEO of JPMorgan Chase, praised Prime Minister Narendra Modi during a luncheon hosted by the Economic Club of New York, lauding India’s achievements. Dimon discussed global finance trends, offering insights into managing economic and geopolitical risks.

In a video shared by Union Minister Piyush Goyal on social media, Dimon, known for his sharp observations on global affairs, commended Modi’s leadership, particularly in poverty reduction, infrastructure development, and bureaucratic reforms, highlighting India’s significant progress under his stewardship. He criticized what he termed as the “liberal press” in India for often criticizing Modi despite his remarkable accomplishments, including lifting around 400 million people out of poverty.

Dimon also praised Modi’s initiatives such as the Swachh Bharat Abhiyan and expressed disbelief at foreign governments lecturing Modi on issues like climate change and labor rights while millions in India lack basic amenities like toilets. He applauded India’s strides in financial inclusion, noting the government’s opening of bank accounts for around 700 million people.

Furthermore, Dimon commended India’s education system and infrastructure development, describing them as impressive. He highlighted Modi’s efforts to streamline bureaucracy and tackle corruption, noting the positive impact on India’s progress. Dimon emphasized the need for similar leadership elsewhere.

Recently, on April 16, the International Monetary Fund projected India to remain the fastest-growing major economy in 2024, raising its growth projections for the country to 6.8 percent.

Pakistan formally requests an IMF bailout package ranging from USD 6 to 8 billion

April 20, 2024, 1:09 pm

Pakistan has formally requested a new bailout package from the International Monetary Fund (IMF), seeking between USD 6 billion to USD 8 billion. The country has also proposed the possibility of additional funding through climate financing. The request includes asking the IMF to send a review mission next month to finalize details for a three-year bailout under the Extended Fund Facility (EFF). However, the exact size and duration of the package will only be determined after reaching a consensus on the key elements of the program in May 2024.

“A high-level delegation led by Finance Minister Muhammad Aurangzeb is currently in Washington for the IMF/World Bank annual spring meetings. Despite portraying a positive outlook on the economy, Pakistan’s external buffers have weakened, largely due to ongoing debt servicing, including Eurobond repayments, according to the IMF’s latest Regional Economic Outlook (REO) for the Middle East and Central Asia.”

“The IMF advised that countries facing inflationary pressures, including Pakistan, should maintain tight monetary policy and closely monitor risks. Pakistan’s economy is projected to grow by 2% in 2024, rebounding from a contraction in 2023, supported by positive base effects in agriculture and textiles.”

“Finance Minister Aurangzeb informed the World Bank in Washington that Pakistan’s economy could reach USD 3 trillion by 2047 if key reforms are fully implemented. The current USD 3 billion IMF arrangement is set to expire in late April, and the government aims to secure a larger and longer-term loan to establish macroeconomic stability and facilitate essential structural reforms.”

“The IMF stressed that implementing reforms to revive Pakistan’s economy is more important than the size of the new loan package being negotiated.”

India’s economy surges: IMF raises growth forecast to 6.8%

April 16, 2024, 8:08 pm

The International Monetary Fund (IMF) recently adjusted its growth forecast for India, raising it from 6.5% to 6.8%. This positions India as the fastest-growing major economy globally, surpassing China’s projected growth of 4.6%. The IMF’s World Economic Outlook attributes India’s growth to strong domestic demand and a growing working-age population.

On a global scale, the IMF upgraded its economic outlook, predicting a “soft landing” characterized by controlled inflation and steady growth. Global growth is anticipated to reach 3.2% in 2024, up from the previous forecast of 3.1%, with a continuation of this growth trend into 2025. The IMF credits much of this expansion to robust growth in the United States, with a forecasted increase of 2.7% in 2024.

Despite concerns about inflation, the IMF expects a decline from 6.8% in 2023 to 5.9% in 2024 globally, further dropping to 4.5% in 2025, particularly in advanced economies due to higher interest rates.

In terms of Asia’s forecast, growth in emerging and developing Asia is predicted to decrease from 5.6% in 2023 to 5.2% in 2024 and 4.9% in 2025, slightly adjusted from the January 2024 WEO Update. China’s growth is also expected to slow from 5.2% in 2023 to 4.6% in 2024 and 4.1% in 2025 due to the easing of post-pandemic boosts to consumption and fiscal stimulus, alongside ongoing weakness in the property sector.

Pakistan Requires Further IMF Bailout for Economic Stability, Shehbaz Sharif said

March 22, 2024, 5:12 am

Pakistan Prime Minister Shehbaz Sharif stated that the financially troubled nation requires another extended bailout from the International Monetary Fund (IMF) to stabilize its vulnerable economy on Thursday, as per ARY News.

“A new tranche of loan is likely to be received from the IMF in a few days, however, we would need another programme,” he said while addressing the session of the Special Investment Facilitation Council (SIFC) apex committee attended by civil-military leadership.

The remarks were made a day following the International Monetary Fund (IMF) reaching a staff-level agreement with Islamabad. This agreement, upon approval by its board, would release the final installment of USD 1.1 billion under the current USD 3 billion standby arrangement.

He mentioned that the International Monetary Fund (IMF) completed the review for the disbursement of the final tranche of USD 1.1 billion, anticipated to be received by next month.

“We will succeed gradually in breaking the begging bowl and coming out of the debt trap with the reforms,” PM Sharif said.

He also appealed to all political parties and provincial governments to support the successful implementation of the agenda for macroeconomic stability in the country, as per ARY News.

“We all have to work together. With the support of all the provinces, we will together resolve all the challenges and difficulties faced by the country”, he further added.

Significantly, during the five-day visit of the IMF mission to Islamabad for the final review of the stand-by program, it was noted that Pakistani authorities had shown interest in seeking another bailout. The stand-by arrangement is set to expire on April 11.

Before the stand-by arrangement, Pakistan had to fulfill IMF conditions, as per ARY News, which included revising its budget, increasing interest rates, and generating revenue through additional taxes, as well as raising electricity and gas prices.

The IMF confirmed Pakistan’s pursuit of a 24th medium-term bailout package to establish enduring structural reforms, according to Dawn.

The IMF announced the staff-level agreement on the successful completion of the existing short-term facility, confirming this development.

In its end-of-mission statement, the IMF stated that, pending approval from its executive board, the staff-level agreement would allow Pakistan to access approximately USD 1.1 billion, equivalent to 828 million special drawing rights (SDR), by late April.