Pakistan’s economic turmoil stoked by International Monetary Fund’s loan trance and devaluation of Pakistani rupee has hit a new low. Pakistan’s finance minister Mohammad Ishaq Dar admitted on Wednesday that the country is facing a massive shortage of US dollars amid “market abuses” of foreign currency within Pakistan. At the same time, Islamabad is seeking Saudi Arabia’s financial assistance alongside the passage of $1.18bn in IMF loans.
The country recently struggled to pay the salaries to staff of some of its missions abroad, citing “fiscal crunch” and “shortage of dollars”.
Up to four months of dues were left unpaid to Pakistan’s missions abroad, which were eventually released on December 14.
We don’t have luxuries like England, US: Pakistan finance minister
Pakistan finance minister Mohammad Ishaq Dar said that central banks around the world including England, Bangladesh and India have intervened in the market and disbursed billions of dollars, a luxury which Pakistan does not have.
“We have to make sure market-abuses must be checked,” he said. “I think that the multilaterals have to understand — we are neither the Bank of England nor the US Federal Reserves. We have foreign exchange constraints.”
Pakistan’s Current Account recorded a deficit of 2.3bn in Sep 2022, according to data published by State Bank of Pakistan.
‘Positive vibes from Saudi’ on financial help: Pakistan finance minister
Earlier on Tuesday, Pakistan finance minister reiterated that the country is seeking financial help from Saudi Arabia that will include doubling the current deferred oil payment facility given by Riyadh to $2.4 billion per year.
“I have discussed both things (financial help and oil facilities) with the Saudi finance minister, and there are positive vibes from there. They said they will support us,” Dar told Pakistani media.
Pakistan forex reserves at record low
Pakistan’s foreign exchange reserves fell another $784 million to a precarious level of $6.715 billion as of December 2, 2022, data released by the central bank showed last Thursday. This is the lowest level of forex reserves since January 2019.
Pakistan entered a $6bn IMF credit line programme in 2019, which was increased to $7bn earlier this year. The IMF so far has not approved the release of $1.18bn in credit for 2022, further burdening the already crumbling economic health of Pakistan.
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