Pakistan will have to stop the debt payments if IMF does not provide loans as soon as possible. The US Bank cautioned as a diplomatic circle in Washington shows Deal is close to signing with Pakistan and IMF. The Bank of America showed a report in which China is a close ally and ready to rescue Pakistan because of its close ties with the country.
An Economist of the team, Kathleen Oh Said,” China holds the key for relief in the near term as it is the largest creditor. With closer ties between China and Pakistan, the hope is rising for China to come on board a backstop to its long-time ally.”
According to sources bank Judged on Monday also quoted economist Kathleen Oh as saying that “unless the payout comes through soon, a state of postponement looks unavoidable.” It’s still not clear after so much discussion with IMF whether and When Pakistan can receive next loan from IMF. Pakistan has imposed terms and conditions given by IMF which has rise inflation to its highest in 25 years. On Thursday Finance secretary Hamed Yaqoob Sheikh told an accord was likely possible in next few days for which Pakistan has missed such a timeline in past.
Governor of state bank told Pakistan has to give $3bn of debt by June while $4bn and hopes to upend. Sources told that Upsend from industries and commercial bank of China before this month has aided to smooth pressure on Pakistan.
Reserves are only sufficient to cover a few weeks of imports. Sources have warned Pakistan’s economic situation is in a critical situation and there is a chance of default. The possibility is high but it is less than 50pc. Krustuns pointed out Pakistan’s currency has devaluated nearly 20pc of its value so far this year. If Pakistan did not get funds, then currency will devalue more which will give rise to inflation.
Washington said Pakistan is really close to a deal and will be finalized in the next few days. Before that Finance Minister Ishaq Dar also expressed his hope for a deal that is near to close with IMF. Foreign Minister Bilawal Zardari also showed anger in postponing the signing deal of the loan with the IMF. He also said,” The cherry on the cake” is the talks with IMF. It’s an ongoing process and not ending which has given rise to an economic crisis. Bilawal has asked all international institutions to provide relief to our people adding that the economic condition is worsening day by day.
