-Pakistan receives assurance from both Saudi Arabia and China: Sources
Shares
ISLAMABAD - Pakistan has received assurances from China and Saudi Arabia for solving its foreign exchange crisis and Pakistan would not have to go to the IMF for a bailout package.
Pakistan financial crisis has worsened at it needs at least 12 billions dollars in the current fiscal year to bridge the financial gap and depleting foreign reserves.
Pakistan had officially asked Saudi Arabia for providing $5 billion deposits for keeping into foreign exchange reserves and provision of oil facility on deferred payments in a bid to ease out the balance of payment crisis.
Now the prime minister-in-waiting Imran Khan has also established contacts as he received a phone call from the Saudi crown prince and it is hoped that the Kingdom will come forward to rescue Islamabad from avoiding the crisis and going back to the IMF to get another bailout package.
Pakistan had requested both China and Saudi Arabia for helping Islamabad avoid the foreign exchange crisis. China, he said, agreed to help Islamabad and provided $2 billion after recent elections.
Pakistan had requested Saudi Arabia to provide $5 billion for deposits to keep into foreign exchange reserves and Pakistan can pay them well on these deposits in our central bank. Pakistan also requested provision of oil facility for five years on deferred payments. We are hopeful that Saudi Arabia will also come forward helping Islamabad overcome the crisis-like situation.
Pakistan had requested the Islamic Development Bank (IDB) for three-year oil payment to the tune of $4.5 billion with $1.5 billion in each year starting from the current fiscal year from July 1, 2018. Pakistan had not made 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 incoming PTI-led government will have to demonstrate its ‘political will’ by taking tough and bold measures on account of reversing the surge in rising imports by increasing additional custom duty by one percent on all imported items except with a few sensitive food or medicines, raising the Regulatory Duty (RD) on luxury items and reducing the budget deficit by boosting revenues and curtailing expenditures projections for the short, medium and long term basis.
“First the incoming government will take steps to reduce the requirement of financing gap as Islamabad will have to discourage rising imports, boosting exports, attracting investment and remittances as well as launching international bonds in first two months. After taking the required steps, then the financing gap will be bridged by Beijing in a bid to avoid the IMF,” official sources said.
The official sources said that the projected financing gap stood at $11.6 billion with business as usual approach so the coming PTI-led government intended to take steps to slash this gap by $2 to $3 billion through reducing imports, increasing exports and investments. Then the remaining gap can be bridged by both China and Saudi Arabia, added the official.
