Shortfall in reserves, rising current account deficit and depreciation of rupee against dollar have left the country facing a balance of payments crisis.
Shortfall in reserves, rising current account deficit and depreciation of rupee against dollar have left the country facing a balance of payments crisis.
Finance Minister Miftah Ismail has said that Pakistan is likely to receive $4 billion from friendly countries this month to bridge the gap in foreign reserves uncovered by the International Monetary Fund. Revival of a $6 billion loan facility.
Mr. Ismail referred on Saturday decrease in foreign exchange reserves The Dawn newspaper said that the International Monetary Fund (IMF) highlighted this.
“According to the IMF, there is a difference of $4 billion,” the minister said.
“By the will of God, we will fill this gap in the month of July,” he said.
“We think we will receive $1.2 billion in deferred oil payments from a friendly country. We think one foreign country will invest between $1.5bn to $2bn in stocks on a G2G (government-to-government) basis, and another The Allies will probably give us gas on deferred payment and yet another Allied country will deposit some,” he said without naming the Allies.
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Pakistan on Thursday signed a preliminary staff-level agreement with the IMF for the revival of a $6 billion line of credit.
The agreement paves the way for the release of the much-awaited $1.18 billion loan tranche that had been stalled since the beginning of this year.
The Dawn newspaper reported that the board is also considering adding $1 billion to the $6 billion program agreed in 2019.
Shortfall in reserves, rising current account deficit and depreciation of rupee against dollar have left the country facing a balance of payments crisis.
Without the IMF deal, which should open other avenues for external finance, Ismail said the country could be headed for default.
He said the country would get around $6 billion from multilateral lenders this fiscal year, including $3.5 billion from the Asian Development Bank and $2.5 billion from the World Bank.
He added that $400 million to $500 million was also expected from the Asian Infrastructure Investment Bank, while the Islamic Development Bank was also likely to raise funding.
He expressed hope that the rupee will strengthen against the dollar soon after the finalization of the IMF agreement, which was expected in the current month.
In addition, he said the government aims to limit energy imports this month to $2.7 billion from $3.7 billion last month, which is expected to ease some pressure from the local currency, as Dawn reported.