ISLAMABAD - Pakistan’s balance of payments crisis has eased due to unexpected foreign inflows in the country that build up the depleting foreign exchange reserves, which would further increase due to auction of telecom licenses, privatisation of state-own entities and Coalition Support Fund.
Central bank reserves fell down to the drastic low level of below three billion dollars in December 2013 mainly due to the heavy repayment to the International Monetary Fund (IMF). The government was struggling to maintain sufficient reserves level despite entering into new IMF programme. However, the recent help from a ‘friendly country’ has taken the country’s foreign exchange reserves to a slighter higher side of $9.52 billion wherein commercial banks-held reserves stood at $4.75 billion and central bank reserves are $4.77 billion. A friendly country has provided $1.5 billion to Pakistan.
Finance Minister Senator Ishaq Dar also stated the other day in a press conference that difficult period in terms of payment has gone and stated that foreign exchange reserves have improved to $9.52 billion from $9.3 billion on March 7, 2013.
“There are still many foreign inflows in the pipeline, which will materialize in next few days that will further enhance the country’s reserves. Pakistan will receive $550 million from IMF in last week of March and $400 million from United States under Coalition Support Fund in near future”, said Rana Asad Amin, advisor and spokesperson to the Finance Ministry while talking to The Nation.
Rana Asad Amin further said that Pakistan is expecting to hold the auction of Eurobond in next month (April) in international market, which would generate $500 million. Similarly, he hoped that Pakistan would receive substantial amount of $800 million from Etisalat against the privatization of PTCL, as Islamabad transferred majority of properties in their favour. “All aforesaid amounts will help in building the country’s foreign exchange reserves”, he concluded. Similarly, the government is expecting to generate around $2 billion from the auction of 3G and 4G telecom licences next month (April). The government has also started privatisation of the public sector entities that would also fetch billions of rupees for the national kitty. Pakistan’s foreign exchange reserves would increase to $16 billion by the end of ongoing financial year (June 30). However, economists still believed that government’s projections like auction of telecom licenses and Eurobond and due amount of Etisalat are still not sure to materialize. “This is temporary phenomena as there is no improvement in economic fundamentals like huge trade deficit, which will insert pressure on rupee “, said eminent economist Dr Qaiser Bangali. However, he was of the view that situation has improved temporarily.