Skip to main content

Import cover shrinks to 1.8 months as forex reserves decline

KARACHI: Pakistan’s depleting foreign reserves brought the country’s import cover down to 1.8 months and the country may soon need to seek $10 to 15 billion of bailout package from the International Monetary Fund (IMF), analysts said on Friday.“Looking at history, it looks like Pakistan usually rushes to IMF when the forex reserves fall below 2 months of goods imports,” Executive Director - Research at Insight Securities Zeeshan Afzal said in an economic outlook. “Currently, the country has 1.8 months of import cover, and the finance managers have started hinting at possible negotiation with the IMF.”The country’s foreign exchange reserves fell 3.3 percent to $16.243 billion during the week ended June 22.Afzal expected the country to back to its usual lender of last resort for up to $15 billion bailout package, “which would also bring more loans flows from other lenders”.“However, the bailout would be contingent upon very strong commitment to reforms as under normal course IMF lends up to 435 percent of country quota,” he said.“Pakistan has utilised 216 percent while the remaining limit means $6.3 billion of more loans.”The analyst said the country needs to raise $38 billion in the next two years, as compared to $16.1 billion external loans of FY2018, to repay about $20 billion of principal and to improve the import cover back to above four months. “As a result, Pakistan’s foreign debt burden would increase by $18 billion i.e. 6 percent of GDP.”Afzal said if the country fails to meet its financing gap or IMF denies bailout “we expect steeper interest rates hike (entering in double digit territory), sharper depreciation (over 10 percent) and sudden drop in GDP growth which would eventually reduce the CA (current account deficit)”.“However, we attach low probability to that event. Though gross loan of $38 billion in two year is huge but net country debt liability (after repayment of the maturing debt) would increase by $11.4 billion in FY2019 and $6.7 billion in FY2020 versus $8.6 billion in FY2018.”

from The News International - Business https://ift.tt/2tT7LNj
Labels:

Comments

Post a Comment

Popular posts from this blog

Student council oath-taking ceremony

Islamabad:The Millennium College hosted a Student Council Investiture Ceremony 2019 at its Flagship Campus, I-9/3, says a press release.The student council comprising of AS & A Level, IBDP program and IGCSE’s vowed under oath that they will be active and responsible members of the student executive council and will abide by the laws made by the college and the managing body to guarantee themselves and the student body a better campus life.Ambassador Ali Sarwar Naqvi graced the occasion and inducted the School’s Head Boy Sarosh Atif and Head Girl Qirrat Ali as well as the Executive Council Members of all clubs and societies established within the school system. After administering the oath, Ambassador Ali Sarwar Naqvi along with the Founder & Chairman The Millennium Education Chaudhry Faisal Mushtaq, Director International Qualifications Azra Tahir and Principal of Millennium College, Campus I-9/3, Muneeze Muzzafar awarded sashes, badges and certificates to the members of the co...
Post a Comment
Read more

Pragmatic steps taken to implement Axle Load Control regime on NH&MP

Islamabad: Ministry of Communications has taken pragmatic steps to implement the Axle Load Control regime on Motorways & National Highways in the country. Sole objective of this move is to control travelling of overloaded vehicles which lead to fatal accidents besides damaging the national asset of road network of billions of rupees.Prior to implementation of axle load control regime, a technical committee was formed, consisting of officers from Ministry of Communications and National Highway Authority which remained in constant contacts with transport community, Members of the Chambers of Commerce and stakeholders hailing from all the provinces. This technical committee visited their offices and held detailed discussions in series of meetings and took them into confidence to facilitate implementation of Axle Load Control regime. The stakeholders assured of their full cooperation and subsequently, implementation of Axle Load Control was realized which is in progress.It is worth to ...
Post a Comment
Read more

UN awards 2 Pakistani female peacekeepers for gender advocacy

The United Nations has awarded two Pakistani female peacekeepers with the Gender Advocacy Award for their “outstanding performance”, a statement from the Inter-Services Public Relations (ISPR) said. In a statement issued on Thursday, the ISPR said the awards were presented to Major Sania Safdar, part of the UN Peacekeeping Mission in Cyprus, and Major Komal Masood, who served in the Central African Republic, “for their outstanding performance and commitment in promoting the ideals of UN”. The accolades were presented by the under-secretary general in the UN’s Department for Peace Operations at its New York headquarters. “While serving in [an] international environment, both officers demonstrated exceptional professionalism [and] dedication,” the ISPR noted. It added that the two peacekeepers “made [a] significant contribution to Mission’s Peace and Stability efforts, especially with regards to advancing women’s meaningful participation in Peacekeeping Operations within the ...
Post a Comment
Read more