ISLAMABAD
\nPakistan is likely to dodge default in the next six months, but its troubles are not over, stated Bloomberg Economics in a report on Monday. Ankur Shukla, who covers South Asia at Bloomberg, stated that help from the International Monetary Fund (IMF) will help the country through the end of June.
\n\u201cBut investors are now worried about a big dollar debt repayment in April 2024, and are pricing those bonds at a distressed level,\u201d the report added, as it made the case for Pakistan needing more external aid. The bond is trading at a 46% discount, reports suggest.
\n\u201cPakistan now has $5.6 billion in foreign exchange reserves, enough to cover the next five months of funding needs. External aid should boost the number to $14.9 billion. This should cover dollar payments only through March 2024 \u2014 leaving the April bond repayment in question,\u201d the report added.
\nPakistan is currently reeling from economic distress amid fast-depleting foreign exchange reserves, weakening rupee, and worsening macroeconomic indicators. It repaid some $1 billion over the weekend, which is likely to result in lower foreign exchange reserves when the State Bank of Pakistan (SBP) releases its data this week.
\nThe Bloomberg report added that the IMF could still withhold remaining loan tranches totaling $2.6 billion. \u201cBut we think this is unlikely given the country\u2019s desperate need in the wake of last summer\u2019s floods.\u201d
\nExperts have said that resumption of the IMF progamme, which remains stalled, is crucial for the country. The IMF funding is also necessary to unlock $5 billion in financing expected from creditor nations and $1.7 billion in aid from the World Bank.
\n\u201cThese funds will help cover $5.9 billion in debt payments and estimated account deficits through the end of the fiscal year ending in June and, again, we think these funds will materialise. \u201cBut the question now is how Pakistan will get through the 12 months after that, when its dollar financing needs will total at least $11 billion.\u201d
\nA delegation of IMF will meet Finance Minister Ishaq Dar on the sidelines of the upcoming Geneva conference to discuss outstanding issues. The Geneva conference, currently underway, is being co-hosted by the Pakistan government and the United Nations, urging countries, organisations and businesses to step up with financial and other support towards a long-term recovery and resilience plan to climate change that saw the country saw disastrous floods last year.
\nAccording to Pakistan\u2019s Resilient Recovery, Rehabilitation and Reconstruction Framework, which it will officially present during the conference, $16.3 billion will be needed in all. Pakistan\u2019s government aims to cover half that amount with \u201cdomestic resources\u201d, including its development budget and through public-private partnerships. <\/p>\n","protected":false},"excerpt":{"rendered":"
ISLAMABAD Pakistan is likely to dodge default in the next six months, but its troubles are not over, stated Bloomberg Economics in a report on Monday. Ankur Shukla, who covers South Asia at Bloomberg, stated that help from the International Monetary Fund (IMF) will help the country through the end of June. \u201cBut investors are […]<\/p>\n","protected":false},"author":2,"featured_media":306567,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-306542","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n