To avoid a full-fledged crisis, Pakistan has devised other measures for filling the growing dollar finance deficit until the halted IMF program is reinstated.
Pakistan urgently needs dollar inflows to rebuild trust, since the current account deficit has widened and foreign currency reserves have been rapidly depleted.
“Without having an alternate plan, the country might plunge into a major crisis-like situation on external account when there will be general elections around the corner in July/August 2022,” top official sources said.
Pakistan and the IMF have yet to reach an agreement on the 7th Review’s conclusion and the disbursement of the $960 million tranches under the $6 billion Extended Fund Facility. The IMF has stated that it will hold talks with the incoming government, and given the current political scenario, the IMF program’s restoration appears to be in jeopardy.
This scribe reached out to Federal Secretary of Finance Hameed Yaqoob for his thoughts. “We’re attempting to get Chinese funds rolled over as soon as possible,” he replied. We will import oil through alternative channels, such as Saudi Arabia’s deferred payment programme and the ITFC (IDB). We’ll also look for outside funding.” The UAE had rolled over its debt a month ago, he claimed, while the Chinese rollover was in the works.