Pakistan’s central bank recently announced the country’s foreign exchange reserves have declined to $4.3 billion, the lowest since February 2014. The new low was due to the payments made to clear off some of the country’s external debt, according to sources.
The country is expecting to receive a $1.1 billion loan from the International Monetary Fund or IMF, which amount is part of the $7 billion loan programme Pakistan entered 4 years ago. However, a number of issues must be concluded first beforehand. In August 2022, the IMF disbursed a tranche of $1.17 billion to Pakistan however the next round of disbursement was halted due to the country having yet to agree to the lender’s conditions. Among those conditions include the agreement to increase energy prices and the expansion of the tax base which Pakistan is reluctant to agree to.
Concurrently, the country is also seeking assistance from its close bilateral partners too, to counter the economic crisis. The visit to the United Arab Emirates by Prime Minister Shehbaz Sharif proves to be fruitful when the Gulf state announced last week they are pledging to roll over $2 billion of existing loans plus an additional one worth another $1 billion to Pakistan.
