An English Daily on August 11, 2017 carried a news report stating that the World Bank has declined Government’s request for a policy loan linking the lending support with the exchange rate adjustment.
It is clarified that the report is incorrect and reflects sheer lack of understanding of the subject and the level of engagement between the Government and the World Bank. The Government of Pakistan and the World Bank remain engaged on an ongoing basis on various projects and programs including policy based lending support within the framework of Country Partnership Strategy 2015-19 of the Bank.
During this fiscal year the Government of Pakistan has not so far officially communicated any specific request for a policy-based loan from the Bank. Therefore, the question of denial by the World Bank for the policy loan does not arise. Furthermore, it is important to note that exchange rate policy does not fall in the domain of the World Bank. Rather maintaining the exchange rate stability is a sovereign decision of the Government of Pakistan.
Therefore, the claim made by the newspaper that the Bank has declined Government’s request for a policy loan is grossly incorrect. The Government would request the media to exercise caution while reporting on such matters as any misreporting based on lack of understanding can potentially damage perceptions with regard to positive outlook of the economy as well as investors’ confidence. This is necessary to protect the hard earned economic gains achieved over the last four years and to carry the growth trajectory of the economy forward.
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