The announcement of petroleum subsidy has created a new challenge. Photo: File
Islamabad: To partially cover the gap of $6 billion in external payments, the government has relied on the $9.7 billion pledge made by the international community to help flood victims in January this year.
The government of Pakistan is still busy settling the details regarding the payments of 6 billion dollars with the IMF, but now the crisis of confidence with the international organization has deepened with the announcement of subsidy of 50 rupees per liter on petroleum. .
The announcement of the subsidy has also sent a message to the international community that the government of Pakistan is not yet ready to fix its house. Couldn’t assure aid coming from other sources except dollars.
Government sources say that the IMF has been assured that Pakistan will get 45 to 700 million dollars from the commitments made by the international community in the Geneva Conference. However, these sources say that the chances of Pakistan getting more than 500 million dollars from the promises made in the Geneva Conference are less.
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Pakistan wants $3 billion from Saudi Arabia and the United Arab Emirates, and the remaining $3 billion will be in the form of project financing and commercial loans, but the commercial bank will not give any loans until things are settled with the IMF. Not ready.
The IMF wants Pakistan to show that the financing gap of 6 billion dollars has been completed before its board meeting, but the government of Pakistan does not seem to be successful in this yet.
Finance Minister Ishaq Dar requested to convene a meeting of the board of the international organization on March 24, but the two sides have not yet reached a staff-level agreement. Meanwhile, Prime Minister Shehbaz Sharif has created a new challenge by announcing subsidy on petrol.
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The IMF has now asked for the details of the subsidy, which the government has not yet provided to it. On the other hand, the official foreign exchange reserves of the government of Pakistan have reached the level of 4.6 billion dollars, including the recently received from China. One billion 70 million dollars in aid is also included.
China gave 500 million dollars to Pakistan in recent days which was spent on external payments in just three days. The government has to deal with the IMF seriously because in the last quarter of the financial year it has 4.1 billion. Foreign payments are to be made in dollars.
In January of this year, the promises made by the international community of 9.7 billion dollars for the reconstruction of flood-affected areas did not include any new funds, but most of the money was for project financing. As the Islamic Development Bank gave 4.2 billion dollars. announced to give, but it also included 3.6 billion dollars given to facilitate oil payments.
Pakistan has received 7.3 billion dollars from external sources during the last eight months, but this amount is insufficient to meet the payments till June.
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