President Dr Arif Alvi has signed the supplementary finance bill 2023 into law. This development will surely lead to unlocking of the stalled International Monetary Fund (IMF) bailout lending as the government has fulfilled one of former’s key conditionalities. The arrival of the IMF tranche will help us shore up country’s foreign exchange reserves and add to investor confidence in a big way.
The overall situation is likely to ultimately fuel economic activity which seems to have grounded to a near halt because of a variety of factors, including import curbs caused by a woeful shortage of dollars.
The ease on restrictions on LCs is now therefore very much in sight. It is quite evident that import curbs have caused, among other things, joblessness on a massive scale. Be that as it may, although a beleaguered PKR has begun to show some positive signs, its full recovery may be a matter of days or weeks.
What is equally important to note in this regard is the fact that China has again lent a helping hand to us to boost foreign exchange reserves in order to successfully avert sovereign default or ward off default threats in short term. Things will improve markedly should Saudi Arabia and the UAE follow in the footsteps of China and the IMF give up procrastination altogether.
MEHDI HASAN (KARACHI)
Copyright Business Recorder, 2023