IMF hands over wish list for progress on loan programme
File photo: IMF Resident Representative in Pakistan, Esther Pérez Ruiz

With the IMF indicating that the talks on the current programme are on track, Pakistan 5-year Credit Default Swap (CDS) decreased by 3,168 basis points.

The decrease on Tuesday means the CDS for Pakistan now stands at 5,882, which represents an overall decline of 6,507 basis points from its peak of 12,388 last month after timely sukuk bonds payment of $1 billion.

“Discussions to date under the ninth review of Extended Fund Facility (EFF) have been productive,” said Esther Perez Ruiz IMF country representative in Pakistan – a comment that boosted the market and created positive sentiments among investors.

She said, “Discussions have enabled a revision to the macroeconomic outlook post floods as well as an in-depth evaluation of fiscal, monetary, exchange rate, and energy policies adopted since the completion of the combined seventh and eight reviews.”

“The IMF looks forward to continue the dialogue over policies that adequately address the humanitarian and rehabilitation needs from the floods,” Ruiz added.

Separately, Finance Minister Ishaq Dar said Saudi Arabia might increase the amount of oil supply to Pakistan on deferred payments to $2.4 billion a year and was likely to double deposits in Pakistan to increase foreign exchange reserves.

In an interview to a private TV channel, Dar also revealed that China had committed to rollover all deposits closer to their refund dates – the promises that can calm down markets in Pakistan.

He said, “I have discussed both things (financial help and oil facilities) with the Saudi finance minister, and there are positive vibes from there. They said they will support us.”

Pakistan’s total payments in the financial year 2022-23 stood around $21 billion and the government had already outlined a plan for paying off the country’s debts, Dar noted.

The finance minister also noted that the current account deficit was expected to decline from $7 to $8 billion when compared with the projections of $11 billion by June 30, 2023.

Saudi Arabia has already extended the term for $3 billion deposit to the State Bank of Pakistan (SBP) through Saudi Fund for Development (SFD).

Dar also said that Islamabad was looking at purchasing oil from Russia on a discounted rate and he had discussed the matter with officials from the US State Department back in October.

The US officials had told him that a G7 pricing committee was being set up for Russian oil products and that there would be a price cap, he added. “(They said) you shouldn’t buy (oil) for above that, and I agreed.”

His statement comes as the EU and G-7 have ensured imposing a $60 per barrel price cap on the Russian oil as the West tries to reduce the income sources of Moscow in response to invasion of Ukraine.

LEAVE A REPLY

Please enter your comment!
Please enter your name here