ISLAMABAD - Pakistan’s balance of payment crisis seems to be ended for current fiscal year as the government is expecting financial package from China and deferred oil facility from United Arab Emirates (UAE) within next few days.

The UAE last week had announced to deposit $3 billion in State Bank of Pakistan’s account on the request of government of Pakistan. The government is also expecting to get oil facility of $3 billion on deferred payment from UAE in next few days, said an official of the ministry of finance. He further said that China is most likely to deposit two to three billion dollars in SBP’s account during current month. Prime Minister Imran Khan had sought financial package from China.

Earlier, Saudi Arabia had announced $6 billion package for Pakistan, as it would place $3 billion cash deposits in the account of State Bank of Pakistan. In addition, it would also provide a one-year deferred payment facility for the import of oil, worth up to $3 billion. So far, $2 billion from Saudi Arabia had been received and another $1 billion would be available early next month (January). The Saudi oil facility would also become operational early next month with a monthly amount of $274 million (around $3 billion).

Pakistan’s financing gap for the current fiscal year 2018-19 had been projected at $12 billion. The PTI-led federal government had approached three friendly countries Saudi Arabia, China and UAE for financial package to bridge the financing gap during ongoing fiscal year.  “Balance of payment crisis has ended now even without the IMF’s loan,” said the official. He informed that oil prices are declining in the international market, which would also ease the pressure on soaring imports of the country.

The SBP’s held foreign exchange reserves are currently standing at $8.05 billion. The reserves would surge to $12 billion after receiving $3 billion from UAE and $1 billion from Saudi Arabia. Meanwhile, Pakistan is also negotiating with International Monetary Fund (IMF) for loan package worth $6 to $8 billion. The IMF programme is essential to unlock access to resources from other multilateral lenders like the World Bank and the Asian Development Bank, as well as from global financial markets.

On the other hand, the country’s current account deficit is under control during current fiscal year, which is easing pressure on foreign exchange reserves. The current account deficit had narrowed around 11 percent to $6.090 billion in the first five months (July to November) of the current fiscal year of 2018/19. In July-November, trade deficit contracted to $14.513 billion from $14.814 billion a year ago, Pakistan Bureau of Statistics data showed. Exports of goods increased 1.29 percent to $9.120 billion, while imports slightly fell to $23.633 billion from $23.818 billion a year earlier. Workers’ remittances to Pakistan totalled $9.028 billion in July-November FY2019 compared with $8.021 billion a year ago.