Beijing vows help cover pro­jected $12bn deficit

The Financial Daily - - FRONT PAGE -

As­sis­tance to come in for­eign ex­change to ser­vice Pak­istan's debt; Pak­istan gets a boost of con­fi­dence but IMF bailout still on cards

Mon­i­tor­ing Desk

IS­LAM­ABAD: Fi­nance Min­is­ter Asad Umar's bullish com­ments declar­ing the end of an eco­nomic cri­sis have bol­stered con­fi­dence ahead of crunch talks with the In­ter­na­tional Mon­e­tary Fund (IMF) on Wed­nes­day, but the coun­try is still likely to need a bailout.

Umar said on Tues­day that "Pak­istan's im­me­di­ate bal­ance of pay­ment cri­sis is over" with­out men­tion­ing the talks with the IMF in Is­lam­abad.

Fi­nance min­is­ter's com­ments came after Prime Min­is­ter Im­ran Khan vis­ited main al­lies Saudi Ara­bia and China.

Pre­mier se­cured $6 bil­lion in as­sis­tance from Riyadh while Beijing promised help cover a pro­jected $12 bil­lion short­fall in for­eign ex­change to ser­vice Pak­istan's debt.

Pak­istan's cen­tral bank chief is due to travel to China on Fri­day to dis­cuss de­tails of what Umar de­scribed as a pledge of "im­me­di­ate money".

An­a­lysts say the cash will give the econ­omy breath­ing space and sta­bilise the cur­rency, which has fallen 25 per cent against the US dol­lar since December, but it will not solve the coun­try's bal­ance of pay­ments cri­sis and avert a se­cond IMF bailout re­quest since 2013, and its 13th IMF res­cue since late the 1980s.

"They are go­ing to the IMF be­cause they have to get credit rat­ing ap­proval from the fi­nan­cial mar­kets and that would not hap­pen on the Saudi or Chi­nese money," Asad Say­eed, an econ­o­mist at the Col­lec­tive for So­cial Sci­ence Re­search said.

Of­fi­cials are con­cerned tough IMF con­di­tions would hit

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