According to Pakistan’s Finance Minister Ishaq Dar, the country possesses $10 billion in foreign exchange reserves as opposed to $4 billion since $6 billion is kept by commercial banks but is also national property.
Speaking to a private television channel on Saturday, the minister stated that Pakistan’s past-due loans are being paid on schedule and that its foreign exchange reserves will “stabilize again very soon.”
The financial czar’s announcement comes a day after this newspaper reported that Pakistan had repaid over $1 billion in loans to two foreign commercial banks, causing the nation’s foreign exchange reserves held by the central bank to drop to $4.5 billion, just enough to pay 25 days of imports.
Two separate repayments to two commercial banks in Dubai in the amounts of $600 million and $415 million have reportedly been made, according to sources.
Dar also informed the news outlet that a delegation from the International Monetary Fund (IMF) will soon visit Pakistan. Additionally, he stated that he will stop in the UAE for a three-day official visit on his way back to Pakistan and that he will meet IMF officials at the Geneva meeting starting tomorrow.
On January 9, the moot will take place, and Dar is anticipated to travel to Geneva with Prime Minister Shehbaz Sharif so they may meet IMF representatives there. The finance minister also expressed his optimism for the speedy release of monies to Pakistan from friendly nations like Saudi Arabia.
It is important to note that the country’s economic operations have already been significantly hampered by the depletion of reserves, the depreciation of the local currency, and the refusal to establish letters of credit (LCs) for private firms.
It is anticipated that Pakistan and the IMF would conduct a meeting the following week to finalize the program’s upcoming ninth review. Pakistan will get an IMF loan payment of more than $1 billion if the ongoing evaluation is successful.
In negotiations to pass the ninth review, which would release $1.1 billion in IMF money and open additional foreign investment as well, a plan outlining a schedule and the financing of the reconstruction effort has been a sticking point.
Dar recently criticized the IMF, claiming that the institution was behaving “abnormally” in its interactions with Pakistan, which enrolled in the $7 billion bailout program in 2019. However, PM Shehbaz has asked the IMF managing director to send a team right away to the nation to begin reviewing discussions for the loan’s subsequent tranche.
The premier’s active involvement in the IMF plan discussions raises the possibility that the finance ministry has lost control of the situation.