Pakistan

Pakistan will be required to give an assurance that its balance of payments deficit is fully financed for the fiscal year ending in June to unlock the next tranche of IMF funding, the fund's resident representative said on Monday, Reuters reported. The funding is critical for the South Asian economy, which is facing a balance of payments crisis, with its central bank foreign exchange reserves dropping to levels barely able to cover four weeks of imports.

Bondholders are bracing for a potential default by Pakistan as the beleaguered nation struggles to meet billions of dollars in debt repayments by June, Bloomberg News reported. The nation’s dollar bonds due next year slid to the lowest since November on Thursday as investors weighed its ability to honor $7 billion of repayments in the coming months, including a Chinese loan of $2 billion due in March, according to Fitch Ratings. The rupee slumped 6.7% to 285.09 per dollar at close, according to State Bank of Pakistan.

Pakistan pledged to pay its sovereign debt obligations this year as it treads close to a possible default with foreign-exchange reserves covering less than a month of imports, Bloomberg News reported. “Come what may, we will be paying off all of our anticipated payments this year,” Commerce Minister Syed Naveed Qamar said in an interview in Washington Tuesday. The government will fulfill its international financial obligations, Finance Minister Ishaq Dar said in a statement the same day.

Talks between the International Monetary Fund and Pakistan will resume virtually on Monday, a Pakistani official said, as the two sides look to reach a deal to unlock funding critical to keep the cash-strapped south Asian country afloat, Reuters reported. The two could not reach a deal last week and a visiting IMF delegation departed Islamabad after 10 days of talks, but said negotiations would continue. Pakistan is in dire need of funds as it battles a wrenching economic crisis.

Pakistan’s Prime Minister Shehbaz Sharif has invited politicians including opposition leader Imran Khan for a conference amid negotiations with the International Monetary Fund to avoid bankruptcy, Bloomberg News reported. Sharif has called an all-parties conference on February 7 amid economic and terrorism challenges, state-run Pakistan Television reports. A team from the lender is visiting Pakistan until February 9 to revive its loan program. Sharif’s ruling coalition government toppled Khan as prime minister in a confidence vote last year.

Pakistan’s moves to loosen its grip on the currency and increase fuel prices indicate that the beleaguered nation is finally taking the unpopular decisions needed to secure the $6.5 billion bailout program from the International Monetary Fund, Bloomberg News reported. The rupee fell to as low as 270 per dollar on Monday, according to the foreign-exchange desk at AKD Securities Ltd., as authorities allowed the currency to be more determined by the market, one of the preconditions of the IMF for the loan.

Millions of people across Pakistan’s major cities were plunged into a blackout prompted by a power grid failure, dealing another blow to the nation already reeling from surging energy costs, Bloomberg News reported. Outages were reported in locations including Karachi, Lahore and capital Islamabad, according to local media reports, and it could take as long as 12 hours to fully restore electricity, Geo TV said, citing Power Minister Khurram Dastgir Khan. Many major businesses were relying on backup power systems, and Pakistan’s stock exchange was trading as normal.

Pakistan’s prime minister said Thursday that the United Arab Emirates agreed to extend a $2 billion loan to his country and provide an additional $1 billion as his nation struggles to recover from devastating floods this summer and a dire economic crisis, the Associated Press reported. Prime Minister Shahbaz Sharif’s office made the announcement after he met with the leader of the UAE, Abu Dhabi ruler Sheikh Mohammed bin Zayed Al Nahyan.

Saudi Arabia said Tuesday that it was considering providing up to $11 billion to Pakistan, a potential lifeline to a country facing default, the Wall Street Journal reported. The United Arab Emirates and Qatar in recent months have said they might also offer help to Pakistan, with potential loans and investments from Gulf nations now totaling at least $22 billion after the latest announcement from Riyadh. Gulf countries have said they could extend a similar level of support to Egypt, which is also struggling economically.