Pakistan

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.

Pakistan’s Finance Minister Ishaq Dar said the government will fulfill its external debt commitments including the repayment of a sukuk bond that’s due in the first week of December, Bloomberg News reported. “There is no chance of default. Repayment will be done on time,” he said in a televised message on Saturday, adding that arrangements for debt repayments for next year have been done “in principle.” Dar estimated the country’s current account deficit would be at $6 billion at the end of June 2023, half that of an earlier projection.

Pakistan will "absolutely not" default on debt obligations despite catastrophic floods, the finance minister said on Sunday, signalling there would be no major deviation from reforms designed to stabilise a struggling economy, Reuters reported. Floods have affected 33 million Pakistanis, inflicted billions of dollars in damage, and killed over 1,500 people - creating concern that Pakistan will not meet debts. "The path to stability was narrow, given the challenging environment, and it has become narrower still," Finance Minister Miftah Ismail told Reuters at his office.

Pakistan's central bank on Monday held its main policy rate at 15%, the bank said in a statement, adding it would closely watch inflation data and global commodity prices, Reuters reported. "Looking ahead, the MPC (monetary policy committee) intends to remain data-dependent, paying close attention to month-on-month inflation ... as well as global commodity prices and interest rate decisions by major central banks," the State Bank said in a statement.