NEW DELHI: In an effort to avoid a debt default, Pakistan Army Chief General Qamar Javed Bajwa has reached out to the United States to request assistance in securing early disbursement of the loan from the International Monetary Fund (IMF), according to a report by Nikkei Asia. He said on Friday.
A day earlier, Pakistan’s central bank said official liquid foreign exchange reserves fell by $754 million to $8.57 billion, marking another sharp drop in the country’s rapidly depleting reserves.
“During the week ending July 22, 2022, SBP reserves decreased by $754 million to $8.575.1 million due to external debt and other payments,” the central bank said in its weekly statement on reserves.
The Nikkei Asia report quoted sources as saying that Pakistan’s army chief has made an appeal to the White House and Treasury to push the International Monetary Fund to provide a $1.2 billion relief package that the country is due to receive under a recently resumed loan program.
Last week, the IMF said it had re-implemented a staff-level agreement with Pakistan that would pave the way for the disbursement of $1.17 billion, if approved by the IMF board, and was considering completing the programme.
Although Finance Minister Muftah Ismail said the nation has avoided default, its debts are trading at distressed levels.
Rising energy import prices pushed Pakistan to the brink of a balance of payments crisis. Its foreign exchange reserves have fallen so low that they are barely enough for five weeks of imports. The Pakistani rupee also weakened to record lows against the US dollar.
The new government withdrew the unfunded support provided by former Prime Minister, Imran Khan, to the oil and energy sectors during his last days in office. On July 1, it also imposed a tax on petroleum that will raise prices by about 70% within a month.