Pakistan’s foreign exchange reserves are stable and certainly notdepleting, said the Finance Division while rejecting reports claiming thatPakistan’s foreign exchange reserves are depleting and that it would not bepossible to float bonds unless the stalled IMF programme is revived.
The Finance Division in a statement termed the reports as completelyfallacious and misleading on all three counts.
First, the marginal fall in reserves referred to in the news item isbecause of the outflows of loans taken from commercial banks. The Ministryof Finance has already completed the process for refinancing of these loansand the funds are expected to flow back in during the next two to threeweeks. More so, the stability in our foreign exchange reserves is reflectedin the improving exchange value of the rupee.
Second, the IMF programme has not stalled. The Government of Pakistan,including the Ministry of Finance and the State Bank of Pakistan as well asall ministries concerned, are in constant consultation with the IMFregarding the different policy initiatives and interventions currentlybeing undertaken.
As the Ministry of Finance has clarified earlier also, we can no longerview the IMF programme in the conventional sense, said the FinanceDivision.
It said that programme benchmarks though remain critical, but their timinghas to be adjusted according to grave socioeconomic challenges posed by thepandemic.
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Third, Pakistan’s ongoing Medium-Term Note (MTN) Programme for the issuanceof Eurobonds/international Sukuk is on track. The Ministry of Finance hasalready initiated the process for engagement of Financial Advisors, whichis expected to be completed by mid-November 2020.
After completion of all required formalities, the international capitalmarkets will be tapped during January/February 2021. It must be noted thatyields on Pakistan’s international bonds have returned to pre-Covid levelsand these bonds are trading at a premium, indicating the confidence ofglobal investors in Pakistan’s economy.
Therefore, the Government does not feel any cause of concern with respectto new issuances and the execution of the MTN programme.
