Pakistani Prime Minister Sheikh Baz Sharif said it was a disgrace that a nuclear power had to beg for money in the face of a sluggish economy, News International reported.
Shehbaz Sharif, speaking at the graduation ceremony of a probationary officer at the Pakistan Administrative Service (PAS) on Saturday, said asking for further loans was really embarrassing for him, adding that seeking foreign loans was not the right solution to Pakistan’s economic challenges as loans would have to return.
During his recent visit to the United Arab Emirates (UAE), President Sheikh Mohamed bin Zayed announced an additional US$1 billion in loans to Pakistan, he said.
Pakistani Prime Minister Shehbaz Sharif also praised Saudi Arabia’s financial support in a speech, rReported by News International.
Meanwhile, sources told International News International that Pakistan is considering approaching friendly countries, particularly Saudi Arabia, for an immediate increase in deposits in a bid to build a financing bridge before finalizing things with the International Monetary Fund (IMF).
Saudi authorities are “studying” the prospect of further deposits with Pakistan amid a squeeze on foreign reserves, government sources said. A senior Treasury official said the uncertain political situation was hampering the decision-making process, making it difficult for policymakers to make the difficult choices needed to restart the IMF program, the report said.
Official sources told the publication that the government does not have much time to act as foreign exchange reserves held by the State Bank of Pakistan (SBP) are rapidly depleting. As of January 6, the central bank held only $4.3 billion in foreign exchange reserves.
The foreign exchange reserves of commercial banks are US$5.8 billion, and the accumulated foreign exchange reserves are about US$10.18 billion. SBP’s reserves decreased by $12.3 billion in the past 12 months; from $16.6 billion on January 22, 2022 to $4.3 billion on January 6, 2023.
A few days ago, Shehbaz hinted that an IMF review team might visit Pakistan, but according to international news reports, that has yet to happen.
Experts say there is a lack of awareness about moving forward, and that events have reached a point where only clear-sighted action can avert a crisis.
Furthermore, the government’s strategy of obtaining dollar inflows from friendly countries and using them as bridge financing until the IMF program resumes has so far failed.
According to News International, friendly countries such as Saudi Arabia have been studying the possibility of depositing an additional $2 billion, but it is unclear how long it will take them to make a decision.
The United Arab Emirates (UAE) also agreed to roll over existing deposits of $2 billion, but did not specifically mention a request for an additional $1 billion in a joint statement issued at the end of the prime minister’s visit to the country.
Notably, a visit by the IMF review team has not yet been confirmed as the government has been unable to make unpopular decisions, including raising gas and electricity tariffs and introducing additional tax measures.
According to international news reports, the government’s tough measures can only pave the way for the completion of the upcoming 9th review under the Extended Fund Facility (EFF).
(Aside from the title, this story is unedited by NDTV staff and published via a syndicated feed.)
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