Business

Chances of Pakistan securing IMF bailout are ‘dimming’: Moody’s

Published

2 years ago

Farwa

Pakistan may not be able to complete the IMF programme.
“Pakistan could default,” says sovereign analyst with Moody’s.
Pakistan is making a final effort to revive its IMF programme.

As the coalition government struggles to meet external debt obligations, Moody’s Investors Service has warned that Pakistan is at an increased risk of failing to restart its $6.7 billion bailout programme with the International Monetary Fund (IMF), putting the country closer to a sovereign default.

“There are increasing risks that Pakistan may be unable to complete the IMF programme that expires at the end of June,” a sovereign analyst with the rating company in Singapore Grace Lim said.

Lim said: “Without an IMF programme, Pakistan could default, given its very weak reserves.”

Pakistan is making a final effort to revive its IMF programme, with a financing gap of $2 billion and exchange-rate policy among the biggest hurdles. While the government has pledged to meet billions of debt obligations, investors have remained sceptical about the nation’s dollar bonds trading in the distressed territory since last year.

Pakistan faces about $23 billion of external debt payments for the fiscal year 2023-24, which begins in July. The amount is roughly five times its reserves and most of it is taken from concessional multilateral and bilateral sources.

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.

The country’s $1 billion bond due in April next year was little changed at about 55.6 cents on the dollar in Asian trading on Wednesday, after sliding almost three cents in the previous two days.

Rupee pressure

The rupee, which is trading near a record low against the dollar, may face further downward pressure, Lim said in an emailed response to questions.

The IMF’s comments on the exchange rate likely referred to the gap in the interbank and retail markets, she said.

The local currency has lost more than 20% this year after officials devalued the currency in January, making it one of the worst performers globally.

Pakistan’s financing options beyond June are highly uncertain, even as its external repayments will remain significant over the next few years, Lim said. Continuing engagement with the IMF would support additional financing from other multilateral and bilateral partners, which could reduce default risk, she said.

Separately, Pakistan is looking to purchase spot shipments of liquefied natural gas for the first time in roughly a year after a rapid drop in overseas prices. This suggests that Pakistan may see itself on a better financial footing, as suppliers were hesitant to sell fuel to the nation last year out of fear it may not be able to meet future payments.

Business

With its second-largest surge ever, PSX approaches 114,000 points.

Published

2 days ago

Farwa

Driven by renewed activity from both private and government financial institutions, the Pakistan Stock Exchange (PSX) saw its second-largest rally in history on Monday.

The market regained many important levels in a single trading session as it rose with previously unheard-of momentum.

Intraday trading saw a top increase of 4,676 points, and the PSX’s benchmark KSE-100 Index gained 4,411 points to settle at 113,924 points. This impressive rebound demonstrated significant investor confidence by reestablishing the 100,000, 111,000, 112,000, and 113,000-point levels.

The market also saw the 114,000-point limit reestablished during the trading session.

The positive tendency was reflected when the market’s heavyweight shares touched its upper circuits. Among the most busiest trading sessions in recent memory, an astounding 85.78 billion shares worth a total of Rs55 billion were exchanged.

Experts credited the spike to heightened institutional investor activity and hope for macroeconomic recovery. Considered a major market recovery, the rally demonstrated the market’s tenacity and development potential.

Business

In interbank trade, the Pakistani rupee beats the US dollar.

Published

1 week ago

Farwa

In the international exchange market, the US dollar has continued to weaken in relation to the Pakistani rupee.

The dollar fell to Rs278.10 from Rs278.17 at the beginning of interbank trading, according to currency dealers, a seven paisa loss.

In the meantime, there was a lot of turbulence in the stock market, but it recovered and moved into the positive zone. The KSE-100 index recovered momentum and reached 116,000 points after soaring 1,300 points.

Both currency and stock market swings, according to analysts, are a reflection of ongoing market adjustments and economic uncertainty.

Business

Phase II of CPEC: China-Pakistan Partnership Enters a New Era

Published

1 week ago

Farwa

The cornerstone of economic cooperation between the two brothers and all-weather friends is still the China-Pakistan Economic Corridor, the initiative’s flagship project.

In contrast to reports of a slowdown, recent events indicate a renewed vigour and strategic emphasis on pushing the second phase of CPEC, known as CPEC Phase-2, according to the Ministry of Planning, Development, and Special Initiatives.

According to the statement, this crucial stage seeks to reshape the foundation of bilateral ties via increased cooperation, cutting-edge technology transfer, and revolutionary socioeconomic initiatives.

Planning Minister Ahsan Iqbal is leading Pakistan’s participation in a number of high-profile gatherings in China, such as the 3rd Forum on China-Indian Ocean Region Development Cooperation in Kunming and the High-Level Seminar on CPEC-2 in Beijing.

His involvement demonstrates Pakistan’s commitment to reviving CPEC, resolving outstanding concerns, and developing a strong phase-2 roadmap that considers both countries’ long-term prosperity.

At the core of these interactions is China’s steadfast determination to turn CPEC into a strategic alliance that promotes development, progress, and connectivity.

Instead of being marginalised, CPEC is developing into a multifaceted framework with five main thematic corridors: the Opening-Up/Regional Connectivity Corridor, the Innovation Corridor, the Green Corridor, the Growth Corridor, and the Livelihood-Enhancing Corridor.

With the help of projects like these, the two countries will fortify their partnership, and CPEC phase-2 will become a model of global economic integration and collaboration that benefits not just China and Pakistan but the entire region.