Pakistan’s prime minister said Tuesday he was hopeful the International Monetary Fund will make its decision in a day or two on the fate of the much-needed $6 billion bailout package for his country, the Associated Press reported. The remarks by Shahbaz Sharif came after he spoke to Kristalina Georgieva, the IMF chief, according to a government statement. The two also met last week, on the sidelines of a global financing meeting in Paris.
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Pakistan
Pakistan’s central bank unexpectedly raised its benchmark rate to a record high in an emergency meeting as the nation makes a final attempt to revive its loan program with the International Monetary Fund, Bloomberg News reported. The State Bank of Pakistan’s monetary policy committee decided to raise rates by 100 basis points to 22%, it said in a statement. The decision has been taken after anticipated inflationary pressure that will come from the recently announced budget and decision to lift restrictions on imports, said the statement.
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The International Monetary Fund (IMF) on Thursday expressed dissatisfaction with Pakistan’s recently presented budget, a blow for the cash-strapped country which has only two weeks left until its bailout programme expires, Reuters reported. Pakistan has barely enough currency reserves to cover one month's imports. It had hoped to have $1.1 billion of the funds released in November - but the IMF has insisted on a number of conditions before it makes any more disbursements.
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Pakistan’s central bank left interest rates unchanged to stop growth from weakening and rein in inflation as the cash-strapped nation and the International Monetary Fund remain deadlocked over bailout loans, Bloomberg News reported. The State Bank of Pakistan’s monetary policy committee decided to keep the target rate at a record 21%, a move expected by a majority of the 44 economists surveyed by Bloomberg. Seven forecast a hike of a 100 basis points and one saw a 200 basis points jump.
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Pakistan’s cash-strapped government on Friday presented its draft for the national budget, allocating funds to fight climate change despite staggering $30 billion in losses from last summer's devastating floods, the Associated Press reported. Lawmakers are expected to approve the proposal by the end of the month, after a clause-by-clause discussion. Prime Minister Shahbaz Sharif's government, which succeeded that of former Premier Imran Khan, has struggled with an unprecedented economic downturn since taking over last year.
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Pakistan's central bank raised its key interest rate to a record 21% on Tuesday as the cash-strapped country bid to curb crippling food inflation and maintain the confidence of foreign creditors, Reuters reported. The 100 basis-point (bp) increase by the State Bank of Pakistan (SBP) was less than the 200 forecast by a Reuters poll of analysts as the country grapples with record annual consumer inflation of over 35%. Global factors have compounded consumer inflation already buoyed by Pakistan's weakening currency, energy tariff increases and hikes in food prices due to Ramadan.
Pakistan has the habit of intentionally creating controversies in order to divert public attention from its own failures, according to a Financial Express analysis. Just last week, Esther Perez Ruiz, who is IMF’s Resident Representative to Pakistan was forced to speak out and clear the air on Islamabad’s “posturing on several key matters.” She told the media that there is no truth in Pakistan Finance Minister Ishaq Dar’s statement that the IMF has asked Islamabad to compromise on its nuclear programme if it wants funds.
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.
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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.
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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.
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