The diminishing reserves and the historic plunge of the Pakistani rupee have escalated the risk of Pakistan defaulting, particularly in the absence of assistance from the International Monetary Fund (IMF).
Pakistan IMF Program Crucial to Avoid Default
As reported by the renowned American magazine Bloomberg, Pakistan faces a growing peril of being unable to resume its $6.7 billion bailout program with the International Monetary Fund (IMF). In light of this predicament, Pakistan has reached a critical point where the risk of default is looming..
The report highlights the escalating risks of Pakistan failing to successfully conclude the IMF program, which is set to expire at the end of June. In the absence of this program, Pakistan’s reserves are in danger of defaulting.
According to a report from the American Journal, Pakistan is making a final attempt to revive its IMF program. Overcoming the significant challenges of a $2 billion financing gap and exchange rate policy is crucial for its success.
Bloomberg’s analysis reveals that Pakistan is confronted with approximately $23 billion in external debt payments for the fiscal year 2024, commencing in July. This amount exceeds its reserves nearly fivefold, with a major portion stemming from concessional bilateral sources.
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In a recent statement, Ayesha Ghos Pasha, the Minister of State for Finance, emphasized the ongoing discussions between Pakistan and the International Monetary Fund (IMF). Pasha revealed that the IMF is actively engaged in dialogues with both the Federal Board of Revenue (FBR) and the State Bank of Pakistan. These discussions hold great promise for the advancement of the Ninth Economic Review.
Furthermore, Pasha affirmed Pakistan’s unwavering commitment to its obligations within the current IMF program. The nation remains dedicated to fulfilling all commitments made under the program. Notably, Pakistan assures that it will not default on any external payments, be it to the Paris Club or any other international organizations. Prompt and timely payments will be made to honor all financial obligations.