Karachi, January 12, 2019: The Pakistan Tehrik e Insaf (PTI) government has successfully managed to generate over $12 billion for the allying Pakistan economy without borrowing from IMF.
Pakistan for the last six months is facing downfall in its foreign exchange reserves due to continued external debt payment and higher import bill. Pakistan total foreign exchange reserves were declined to $13.5 billion in the first week of January 2019. Out of total reserves the State Bank of Pakistan’s reserves stood at $7.049 billion during the week ending 04January2019. While some $6.548 billion were held with commercial banks.
In order to avoid default for the first day PTI government is trying to manage the external account, which is under pressure since one and half year due to massive scheduled external debt servicing.
Sources said that Federal Finance Minister Asad Umer is trying to get loan from International Monetary Fund (IMF) for the support of balance of payment. While, Prime Minister Imran Khan, who is opposing IMF Liam for the first and even before forming government, was trying to get help from Pakistan’s closed friends like Saudi Arabia, China, UAE and Turkey.
The ongoing balance of payment crisis also compelled the Prime Minister to initiate the international visits to sought help for balance of payment against his first announcement that he will not visit any country in the initial first six months.
So far, Prime Minister has visited Saudi Arabia, China, UAE and Turkey to generate funds to avoid default as current reserves are even not sufficient for two months imports.
With continued efforts of Imran Khan, Pakistan has successfully managed to generate over $ 10 billion for balance of payment support.
Saudi Arabia has pledged $ 6 billion. As per announcement some 3 billion dollars will be placed with Pakistan for a period of one year, while remaining $3 billion will be in shape of deferred oil payment facilitaty.
As pledged by Saudi Arabia, so far Pakistan has received some $2 billion from Saudi Arabia. Some one billion dollars were arrived in November 2018. While, another one billion dollar were released in December 2018. The third trance of one billion dollar will be arrived during this month.
However, these inflows of two billion dollars have been almost utilised for external debt servicing.
Khan’s China visit was not successful as it was expecting and China has not announced or pledged any bailout package for Pakistan. However, talks with China for a commercial loan of $2 billion are in final stage.
During UAE visit, Prime Minister Imran Khan has successfully managed to get $3 billion to ease balance of payment and build the depleting foreign exchange reserves.
In addition, Pakistan is also negotiating with Qatar for deferred gas supply of one billion dollars for one year.
It is being expected that with maturity of all these pledged amounts, Pakistan’s total foreign exchange reserves will reach $ 20 dollar by end of June this year and Pakistan will become out of balance of payment crisis.
Pakistan is also negotiating with IMF and most likely to get a loan of $ 5 billion for balance of payment support. But the amount is much less than initial estimates of $ 12 billion.