Pakistan’s currency plunged as much as 5 per cent on Friday in what traders suspect was a devaluation of the currency amid rescue talks with the IMF, the Financial Times reported. The currency traded as weak as 141 rupees to the US dollar, from Thursday’s closing level of 133.9, according to Refinitiv data. ”The IMF’s main demands [for a new loan] included a devaluation of the rupee,” a central bank official in Karachi told the Financial Times. The rupee has tumbled about a fifth since the end of last year in a series of devaluations to avoid a balance of payments crisis.
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Pakistan’s prime minister Imran Khan was welcomed in Beijing with full honours and promises of support but hopes of Chinese help to rescue the country from a looming balance of payments crisis were dented by the conspicuous absence of any concrete announcement of generous aid, the Financial Times reported. Pakistan is seeking its 13th bailout since the 1980s from the International Monetary Fund. An IMF delegation is expected to visit Islamabad this week to begin discussions on a crucially important new loan to help avert crisis.
The International Monetary Fund launched formal bailout talks with Pakistan on Thursday, and IMF managing director Christine Lagarde said she would require “absolute transparency” of Pakistan’s debts, including those owed to China, Reuters reported. She said such disclosures were necessary to determine the debt sustainability of countries seeking IMF loans. The requirements are likely to shine a spotlight on the extent, composition and terms of Pakistan’s debts to China for infrastructure projects as part of Beijing’s massive Belt and Road building program.
As former cricket star Imran Khan prepares to take his oath as Pakistan’s new prime minister Saturday, there’s one thing he must be clear about: Pakistan may be China’s friend at the moment, but the relationship could quickly turn sour. In the next month or so, Islamabad may have to take another bailout package from the International Monetary Fund — the country’s 13th, a Bloomberg View reported. The State Bank of Pakistan now holds just over $10 billion in foreign exchange reserves, giving enough room to buy only two months’ worth of imports. But the IMF route is tedious.
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Imran Khan, Pakistan’s former cricket captain and newly elected prime minister, is on a sticky wicket. His victory in last week’s polls was secured in part on a pledge to ramp up spending on public services. Yet the coffers are empty and a balance of payments crisis looms, the Financial Times reported. Instead of the “Islamic welfare state” he hoped to create, his aides are forced to ponder the prospect of an IMF deal. Even that safety net may not be at hand.
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Imran Khan is a newcomer to power in Pakistan, but his first challenge is a familiar one for the country: a crushing financial crunch that will likely require an international bailout and spending cutbacks, The Wall Street Journal reported. After decades on Pakistan’s political fringe, nearly complete results show that Mr. Khan’s party took more than twice as many seats in parliament as its main competitor, whose highest profile leader is the now-jailed former Prime Minister Nawaz Sharif. Mr.
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Pakistan has asked China to keep lending it money to avert a foreign currency crisis, warning that Beijing’s planned $60bn investment in the south Asian country was at risk if it failed to do so, the Financial Times reported. Pakistan borrowed $4bn from China in the year ending June 2018, according to government officials, and wants to keep the money flowing to avoid having to ask the IMF for a bailout.
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As an industrialist in Pakistan’s southern port city of Karachi recounts his woes, from frequent power cuts to a shortage of trained workers, his accountant barges in with a question. “Sir, how much should we earn from the farm this year?” the Financial Times reported. “Let me see how much we need to earn from the farm and get back to you,” the industrialist replies. The encounter provides a glimpse of one of Pakistan’s toughest economic challenges: reforming its chronically dysfunctional tax-collection system.
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The Trading Corporation of Pakistan (TCP) has nearly reached on the brink of bankruptcy due to end of credit limit from Ministry of Finance (MoF) while several government departments also owe billion of rupees to the national entity, the Daily Times reported. The sources in MoF said Thursday that credit line for TCP of Rs 110 billion has been utilised and tenders for soft commodities are also sitting in cold storage. He said the governments of four provinces, besides Azad Kashmir administration and departments of Northern Areas are also defaulters of TCP for more than Rs 33 billion.
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Officials from Pakistan have held talks with the International Monetary Fund (IMF) to discuss its $11bn loan package in the wake of the devastating floods, the BBC reported. The IMF's regional director, Masood Ahmed, told the BBC the organisation wanted to find a way to help Pakistan "through this difficult phase". This could include lowering some fiscal targets or allowing Pakistan to apply for emergency natural disaster funding.
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