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Pak seeks largest loan package from IMF: Report

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On Tuesday, the IMF said that it would listen to Pakistan’s request for financial support “very, very attentively”, as it did with any member with good standing.

 

Islamabad | Pakistan is seeking its largest loan package of up to USD 8 billion from the IMF to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country’s economy, a media report said Thursday.

The International Monetary Fund (IMF) could place strict conditionalities, forcing Pakistan to seek additional loans for meeting those restrictions and this could expand the loan facility to USD 12 billion, said the report in the Dawn newspaper.

Pakistan began exploring the possibility of yet another loan package with the IMF while the Pakistan Muslim League (Nawaz) PML-N was still in power and the exploratory talks continued under the interim government as well, it said.

The final decision, however, was announced on Monday night when Finance Minister Asad Umar confirmed that the government was going to the IMF to bail Pakistan out of its foreign currency crisis.

The announcement followed the highest single-day loss in a decade in the stock market, which plunged by over 1,300 points, losing almost Rs 270 billion of its capitalization.

On Tuesday, the IMF said that it would listen to Pakistan’s request for financial support “very, very attentively”, as it did with any member with good standing.

Pakistan has received more than a dozen financial support packages from the institution in the past. It completed the last three-year package of USD 6.4 billion in August 2016, which was 216 percent of Pakistan’s quota at the IMF.

Meanwhile, the government came under heavy criticism after announcing that it would seek bailout assistance from the IMF, but Prime Minister Imran Khan Wednesday defended the decision.

Khan said that the country was burdened due to debts incurred by the previous government and his government was constrained to borrow more money to pay back those debts.

“There has been a lot of noise in the country during the last 48 hours as if the heave is going to fall. But we need to do it before our reforms start yielding results in about six months,” he said.

The government’s decision will create hardships for Khan as the IMF’s tough conditions will result in the price hike.

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Brexit Woes

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With just six weeks remaining before United Kingdom’s (UK) exit from the European Union (EU) termed as Brexit, Theresa May’s government does not seem to be making much progress and her opponents seem to be calling her out on this front. As Europe’s biggest crisis in decades stares it in the face and Britain, once its biggest and most powerful constituent seems to the on the ropes, the entire world is watching.

UK’s PM Theresa May suffered yet another blow from her parliament as legislators voted against her renegotiated deal with the EU. Just weeks after renegotiating the deal with European Union after MPs in the lower house voted 317 to 301 to order her to seek new terms with the bloc, she again failed to sell the deal to her parliament who on Thursday voted 303 to 258 against the motion. This paves the way for a no deal Brexit situation as the March 29st deadline is fast approaching. A no deal Brexit could have disastrous consequences for Britain in terms of loss of business, loss of jobs and not to mention the impact it can have on the pound.

For Britain to negotiate a successful Brexit deal, UK PM Theresa May must reach an agreement with the European Union and then get the same deal passed through her Parliament. Many in May’s own government do not view her as a strong leader and hence do not seem to be supporting her actions with opposition Labour Party leader Jeremy Corbyn urging May to “admit her Brexit strategy has failed”.  May, however, shrugged off the latest defeat and termed it as a temporary difference of opinion and seems to be confident her strategy would see the light of day.

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China decries ‘political manipulations’ behind Huawei case in US

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Beijing | China on Tuesday decried the “political manipulations” behind the US case against Huawei as Washington indicted the tech giant’s chief financial officer and levelled sweeping charges against the company.

“For some time, the US has used state power to discredit and crack down on specific Chinese companies in an attempt to strangle the enterprises’ legitimate and legal operations,” China’s foreign ministry said in a statement.

“There are strong political motivations and political manipulations behind the actions.”

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PAK, UAE sign USD 3 billion bailout package

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Islamabad | Pakistan and the United Arab Emirates (UAE) on Tuesday signed a USD 3 billion bailout package, as part of Abu Dhabi’s support to boost the cash-strapped country’s dwindling dollar reserves.

The UAE in December last year had announced to provide USD 3 billion financial assistance to Pakistan after Saudi Arabia made a similar commitment to help Islamabad successfully overcome international payment crisis and to avoid a stringent International Monetary Fund (IMF) deal.

Tuesday’s agreement was signed between State Bank of Pakistan (SBP) chief Tariq Bajwa and Abu Dhabi Fund for Development (ADFD) Director General Mohammed Saif Al Suwaidi.

“UAE has formalized US$3bn deposit in the State Bank of Pakistan. DG ADFD & the Governor SBP inked the agreement at #ADFD Headquarters in Abu Dhabi,” Foreign Office spokesman Mohammad Faisal tweeted.

He said the agreement will help Pakistan achieve financial stability and overcome economic challenges and noted ADFD’s support over the years to stimulate Pakistan’s economic growth and sustainable development.

Speaking on the occasion, Suwaidi said, “The directive to deposit USD 3 billion with the State Bank of Pakistan aligns with the UAE leadership’s keenness to bolster Pakistan’s economy, help its government achieve financial stability and overcome economic challenges, and drive comprehensive development in the country.”

He added, “ADFD and the Government of Pakistan have enjoyed strong and long-standing ties dating back to 1981. The Fund’s efforts have significantly contributed to improving socio-economic conditions in the country, boosting strategic growth and achieving the development priorities of the Pakistani government.

To date, ADFD has provided AED1.5 billion to fund sustainable development projects in Pakistan spanning diverse sectors, including transport, water and agriculture, healthcare, and education, according to a press release.

The UAE had committed the financial assistance during Prime Minister Imran Khan’s visit to Qatar last month to seek investment and provision of LNG on deferred payments.

Pakistan has a 15-year contract with Qatar for a supply of LNG.

The Saudi and the UAE governments have played a major role in helping Pakistan to meet around USD 12 billion shortfall in balance of payments in 2018-19 fiscal year, government officials said.

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