IMF Pushes Pakistan to Increase Imports Despite Low Reserves, Risking Further Rupee Decline

• IMF proposes 45% increase in imports in H2 fiscal year, which may destabilize rupee • New conditions set for release of last $1.2B tranche of IMF bailout package • Imports declined 16% in H1; IMF wants relaxation to boost economy • Pakistan foreign reserves only cover 6 weeks of imports currently • SBP reserves increased marginally by $13M to $8.056B on Feb 9