Wall Street Journal has reported that Pakistan is struggling to rescue the bailout package by International Monetary Fund. The country’s foreign exchange reserves have dropped to $6.7 billion and import restrictions have been put into place.
According to government data, foreign-exchange reserves are barely enough to pay for about six weeks of imports. The government has requested Saudi Arabia for an emergency $3 billion loan. This would be the second time that Saudis are likely to bail out Pakistan as they assisted only a month ago with a tranche of $3 billion.
WSJ reports that the IMF’s representative in Pakistan, has confirmed that 'discussions with Pakistan were taking longer than expected.' The representative added that 'not all economic targets set by the IMF were met, and new developments took place, especially catastrophic floods in the country this summer.'
State Bank’s restrictions on the opening of letters of credit have also affected the business environment.
“If they are not able to import, the entire machinery stops,” WSJ quoted Zubair Motiwala, chief executive of the Trade Development Authority of Pakistan.
Officials state that Pakistan needs at least $33 billion to make foreign debt payments of $23 billion and cover a $10 billion trade deficit.
During the last seven years, Pakistan’s external debt and liabilities were doubled to $130 billion.
However, the government a few days ago paid $1 billion due on an international bond and its next international bond payment isn’t until 2024.
According to government data, foreign-exchange reserves are barely enough to pay for about six weeks of imports. The government has requested Saudi Arabia for an emergency $3 billion loan. This would be the second time that Saudis are likely to bail out Pakistan as they assisted only a month ago with a tranche of $3 billion.
WSJ reports that the IMF’s representative in Pakistan, has confirmed that 'discussions with Pakistan were taking longer than expected.' The representative added that 'not all economic targets set by the IMF were met, and new developments took place, especially catastrophic floods in the country this summer.'
State Bank’s restrictions on the opening of letters of credit have also affected the business environment.
“If they are not able to import, the entire machinery stops,” WSJ quoted Zubair Motiwala, chief executive of the Trade Development Authority of Pakistan.
Officials state that Pakistan needs at least $33 billion to make foreign debt payments of $23 billion and cover a $10 billion trade deficit.
During the last seven years, Pakistan’s external debt and liabilities were doubled to $130 billion.
However, the government a few days ago paid $1 billion due on an international bond and its next international bond payment isn’t until 2024.