Analysts termed former JPMorgan banker Muhammad Aurangzeb as a “better choice” to manage the country’s economy ahead of the crucial negotiations with the International Monetary Fund (IMF) for a fresh bailout package this month, Bloomberg reported on Tuesday.
Brokerage firm Topline Securities said Aurangzeb’s appointment — over former four-time finance minister Ishaq Dar — is a “better choice” given his decades of experience in the financial sector
“Investors were more keen to see who will be the new finance minister as he will be the key person negotiating with the IMF,” the firm told Bloomberg.
Topline Securities believed that the appointment of non-elected technocrats to the cabinet is helping address the country’s “economic challenges”.
BML Capital Management’s Ali Raza termed the newly appointed finance czar as a “solid guy” who he said is expected to do what is required to get Pakistan on a long-term structural reform path.
“Past interviews suggest that he thinks Pakistan needs to enhance its tax base by tapping into the retail and real estate sector,” he added.
According to Raza, Finance Minister Aurangzeb is also a proponent of a cashless economy through digitalisation, and will support civil-military-led Special Investment Facilitation Council (SIFC) efforts for the privatisation process within the country.
Pakistan urgently needs a fresh IMF agreement to shore up an economy suffering from high inflation, low reserves and high external financing needs.
Pakistan’s current $3 billion, nine-month Stand-By Arrangement (SBA) expires next month, and it is crucial for the country’s economic team to negotiate a longer term programme immediately afterwards.
Aurangzeb confirmed that Islamabad’s talks with the IMF under the $3 billion SBA are likely to commence this week with the government to send a formal request to the global lender to cushion Pakistan’s dwindling economy, The News reported on Tuesday.
According to sources, the Pakistani side would dispatch an email to the IMF headquarters in Washington DC to send its review team to Islamabad for the talks and release of the last tranche worth $1.1 billion.
Prime Minister Shehbaz-led government might also request to commence talks for a fresh medium-term bailout package for $6 billion Extended Fund Facility (EFF) with the strong chances to increase it with climate financing of $1.5 to $2 billion more to secure additional financing from the IMF compared to the allocated quota for Pakistan.
