2023-06-30 17:54:30
The deal is done, just hours before the current agreement between Islamabad and the International Monetary Fund (IMF) expires. Pakistan obtains a loan of 3 billion dollars from the IMF (approximately 2.74 billion euros). The deal is comingon the edge. This sort of bridging loan will provide much-needed respite to Pakistan.
The list of difficulties of the fifth most populous country in the world is plethoric: crisis of its balance of payments, high external debt, plunge of the rupee, inflation which reached 38% in May, nervousness of investors during months of political chaos. ..
A number sums up the urgency of the situation. $3.5 billion. That’s all there was left of currency reserves in Islamabad, enough to pay for only three weeks of controlled imports. The government now sees these reserves amounting to 14 billion dollars (about 12.83 billion euros) at the end of July.
General elections in October
Despite the crisis, the negotiations dragged on on the reforms to be carried out, letting the rupee float freely against the dollar or even the abolition of numerous subsidies. These measures were potentially unpopular and all the more difficult to implement as the general elections loom in October.
Beyond the $3 billion bailout, this deal that has yet to be formally validated by the IMFshould promote other multilateral and bilateral aid.
Also to listenDECRYPTION – Pakistan on the brink of the abyss
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