Pakistan IMF Loan: Pakistan will only be able to have breakfast with the amount of IMF, as much as mustard seeds in mountain-like debt crisis – imf bailout package is very little for pakistan as its economy crisis is huge
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18 days of life
According to the State Bank of Pakistan, the country’s currency reserves are falling due to foreign debt. Karachi-based investment firm Arif Habibi Ltd said that foreign exchange reserves have reached the lowest level since February 2014. It is sufficient only for 18 days. AHL chief Tahir Abbas has said that the country is in dire need of cash and the IMF program should be started as soon as possible so that a major crisis can be avoided. Foreign exchange reserves are the reserves of a country’s cash and other assets, including gold, held by the central bank and other financial institutions such as the IMF.
Why is it important to have currency reserves
The central bank of any country maintains this currency reserve at fixed rates to the value of the domestic currency. The domestic currency is kept at a lower level against the dollar, maintaining liquidity in times of economic crisis. The needs of the country are met. The central bank can take steps to ensure imports and exports and exchange foreign currency for local currency, as the crisis has hit Pakistan. But if the currency reserves are low then it is difficult. Foreign exchange reserves are used to repay financial loans. This is where Pakistan is in trouble.
so much debt
At present, the total foreign debt on Pakistan is 126.9 billion dollars. Its foreign exchange reserves stand at $3.09 billion. China’s debt is 30 billion dollars. IMF can release only $ 1.18 billion for Pakistan under such a huge debt. The inflation rate in the country has reached the highest level in the last 48 years and is at 27.55 per cent. 23 times Pakistan has reached the shelter of IMF for financial help. Now, in this situation, it is difficult to even guess how useful this amount of IMF will be.
poverty and dark days
Pakistan’s troubles are unlikely to end without a bailout package. So far, it has received $10 billion from China. The amount has been given in the form of deposits and credits towards UAE and Saudi Arabia. In January, Pakistan was given less than three billion dollars from the UAE. Until this amount does not mature, he will not get two billion dollars. He postponed this amount and gave an additional loan of one billion dollars to Pakistan. The days ahead are full of darkness and poverty for the people of Pakistan.
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