ISLAMABAD – Pakistan has received assurances from China and Saudi Arabiafor solving its foreign exchange crisis and Pakistan would not have to goto the IMF for a bailout package.
Pakistan financial crisis has worsened at it needs at least 12 billionsdollars in the current fiscal year to bridge the financial gap anddepleting foreign reserves.
Pakistan had officially asked Saudi Arabia for providing $5 billiondeposits for keeping into foreign exchange reserves and provision of oilfacility on deferred payments in a bid to ease out the balance of paymentcrisis.
Now the prime minister-in-waiting Imran Khan has also established contactsas he received a phone call from the Saudi crown prince and it is hopedthat the Kingdom will come forward to rescue Islamabad from avoiding thecrisis and going back to the IMF to get another bailout package.
Pakistan had requested both China and Saudi Arabia for helping Islamabadavoid the foreign exchange crisis. China, he said, agreed to help Islamabadand provided $2 billion after recent elections.
Pakistan had requested Saudi Arabia to provide $5 billion for deposits tokeep into foreign exchange reserves and Pakistan can pay them well on thesedeposits in our central bank. Pakistan also requested provision of oilfacility for five years on deferred payments. We are hopeful that SaudiArabia will also come forward helping Islamabad overcome the crisis-likesituation.
Pakistan had requested the Islamic Development Bank (IDB) for three-yearoil payment to the tune of $4.5 billion with $1.5 billion in each yearstarting from the current fiscal year from July 1, 2018. Pakistan had notmade a request of $4 billion cash loan to the IDB in our tenure in power.
After assuming reins of power, the official sources said that the incomingPTI-led government will have to demonstrate its ‘political will’ by takingtough and bold measures on account of reversing the surge in rising importsby increasing additional custom duty by one percent on all imported itemsexcept with a few sensitive food or medicines, raising the Regulatory Duty(RD) on luxury items and reducing the budget deficit by boosting revenuesand curtailing expenditures projections for the short, medium and long termbasis.
“First the incoming government will take steps to reduce the requirement offinancing gap as Islamabad will have to discourage rising imports, boostingexports, attracting investment and remittances as well as launchinginternational bonds in first two months. After taking the required steps,then the financing gap will be bridged by Beijing in a bid to avoid theIMF,” official sources said.
The official sources said that the projected financing gap stood at $11.6billion with business as usual approach so the coming PTI-led governmentintended to take steps to slash this gap by $2 to $3 billion throughreducing imports, increasing exports and investments. Then the remaininggap can be bridged by both China and Saudi Arabia, added the official.