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‘Pakistan’s Foreign Exchange Reserves Will Fall To Zero By December’

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Pakistan’s current financial trajectory suggests that its foreign exchange reserves may fall to a zero by the month of December, analysts say.

Khurram Husain told Khabar Say Aagay host Raza Rumi that the country may default in either Sep or Oct, even before the projected end of the exchange reserves.

While speaking during the podcast on Wednesday, the analyst said that Pakistan may not avert a default unless it receives an additional $3bn to $5bn during the next two to three months.

According to journalist Javed Farooqi, it will be the caretaker technocrats making certain decisions, such as the deal with the IMF so as to allow the PML-N space to save some of its credibility before they enter the election battle.

Nadia Naqi said the politicians and those at the helm still don’t seem to be taking inflation seriously. “The situation right now would have been different in case of timely elections.”

She added that political instability isn’t to entirely blame for the current state of the economy. “What has the government itself done during the previous year?”

Moody’s Investors Service has warned that Pakistan is at an increased risk of failing to restart its $6.7 billion bailout program with the International Monetary Fund (IMF).

“There are increasing risks that Pakistan may be unable to complete the IMF program that expires at the end of June,” said Grace Lim, a sovereign analyst with the rating company in Singapore. “Without an IMF programme, Pakistan could default, given its very weak reserves.”

Pakistan faces about $23 billion of external debt payments for the fiscal year 2023-24 which commences in July. On Monday, State Bank of Pakistan (SBP) Governor Jameel Ahmad denied officials were seeking debt restructuring talks as the country will pay $900 million of sovereign debt in June and expects $2.3 billion of obligations to be rolled over.

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