Pakistan could default without IMF bailout programme: Moody’s

LAHORE: Pakistan could face default without an International Monetary Fund (IMF) bailout programme as the country is likely to embrace uncertain financing options beyond June, Bloomberg reported while quoting Moody’s Investors Service on Tuesday.

“We consider that Pakistan will meet its external payments for the remainder of this fiscal year ending in June,” Grace Lim, a sovereign analyst with the ratings company in Singapore, was quoted as saying in an emailed response to Bloomberg. “However, Pakistan’s financing options beyond June are highly uncertain. Without an IMF programme, Pakistan could default given its very weak reserves.”

The remarks come as Pakistan remains engaged with the Washington-based lender to resume its bailout programme that has been stalled at the ninth review since November last year. Various measures including a floating exchange rate, additional taxes, and hike in energy tariffs have failed to convince the IMF to resume the bailout.

Instead, the IMF reiterated that it is working with Pakistani authorities to bring the pending ninth review to conclusion “once the necessary financing is in place and the agreement is finalised”. Pakistan has secured nearly half of its necessary financing after its officials said Saudi Arabia and UAE have pledged providing a combined $3 billion. However, the amounts are yet to be deposited in Pakistan’s central bank, and its official foreign exchange reserves still stand at a precarious level.