Skip to main content

Pakistan could become ineligible for World Bank loans due to its declining foreign reserves

Pakistan could become ineligible for World Bank loans due to its declining foreign reserves

Tue Aug 15 2017

Islamabad, Aug. 15 -- Pakistan could become ineligible for financial aid from one of the two main arms of the World Bank Group - the International Bank for Reconstruction and Development (IBRD), as the country's official foreign currency reserves are rapidly declining.

A loan-seeking country should have official foreign currency reserves equivalent to three months of import bill to qualify for IBRD loans.

Pakistan's reserves stood at USD 14.3 billion on August 4 this year and these reserves include USD 3.9 billion in short-term borrowings by the central bank.

The Express Tribune quoted sources in a multilateral lending agency and the Ministry of Finance as saying that that gross foreign currency reserves may slip below the threshold of three-month import cover either in the last week of August or the first week of September.

Pakistan's Finance Ministry will have to immediately look for ways to increase its foreign currency reserves in order to rein in the declining reserves

Pakistan's official foreign currency reserves have dropped $4.2 billion since the end of the International Monetary Fund's (IMF) assistance programme 11 months ago.

A spokesman for the Ministry of Finance said that the government expected a significant increase in foreign direct investment and other inflows including official ones as exports and remittances returned to the growth zone.

He informed that the government was also working on more measures which would be rolled out after finalization.

According to the report, the government was reviewing different options which include incentives for expatriates to invest in Pakistani dollar-denominated bonds to keep the reserves above the three-month import bill.

The government is also considering of more restrictions on imports and steps that will encourage exporters to bring back export proceeds.

Pakistan's total imports swell to a record $53 billion in the previous fiscal year and keeping that in view, the three-month average imports came in at $13.3 billion.

The World Bank Group comprises five institutions. Its two arms - the IBRD and International Development Association (IDA) - give loans to governments.

The IBRD offers loans for projects, programmes or policy purpose as well as hedging products to help manage the currency and interest rate risk exposures.

IDA is a concessionary lending window that extends funds to the poorest developing countries.

In case, Pakistan borrowing from the World Bank Group will be limited to the IDA if it gets disqualified for IBRD loans.

Pakistan's creditworthiness would get affected if the World Bank stopped Islamabad from IBRD borrowing.

Comments

Post a Comment

Popular posts from this blog

OnePlus 5T Rumours: Release Date, UK Price, Features & Specifications

OnePlus 5T Rumours: Release Date, UK Price, Features & Specifications  18 Oct. 2017 21:44 OnePlus 5T could be announced on 5 November. We round-up the rumours on the new OnePlus 5T specifications, features, price and UK launch date. We’ve seen a ’T’ suffixed OnePlus before in the  OnePlus 3T . That phone arrived six months after the OnePlus 3, so the timing is right here for a successor to the  OnePlus 5  in the OnePlus 5T. However, rumours of a  leaked event invite  for 5 November have been confirmed false by OnePlus. The original T model OnePlus in essence gave the handset a speed boost, moving from the 2.2GHz Snapdragon 820 in the OnePlus 3 to the 2.35GHz Snapdragon 821 in the 3T. The new chip offered a 10 percent performance boost. OnePlus also upgraded the selfie camera from an 8Mp model to a 16Mp version that performed better in low light, and it increased the battery capacity from 3000mAh to 3400mAh. A new 128GB stor...
Post a Comment
Read more

It departments seized 650 Crore from Cafe Coffee day’s owner Siddhartha!

  IT departments seized 650 Crore from Cafe Coffee day’s owner Siddhartha! 25 Sep. 17:46 IT departments seized 650 Crore from Cafe Coffee day’s owner Siddhartha!  :- Well, as per the sources reports, IT officials find 650 Crore from a BJP leader Krishna’s son-in-law’s house. The Income-tax Department seized the money as they were informed about some black money in his house. Also, the sources are saying that currently, anybody from the house is not saying anything because they all are exposed. A senior tax officer said “Documents seized from the search operations at 25 places of Cafe Coffee Day and its group companies in Karnataka, Mumbai, and Chennai have revealed concealed income of over Rs 650 crore,” Also, the reports are saying that department raided on 25 properties connected to VG Siddhartha began on Thursday. Also, the raided held in the state capital, Hassan, Chikmagalur, Chennai, and Mumbai. IT departments seized 65...
Post a Comment
Read more

Xiaomi Mi Mix 2 vs. Samsung Galaxy S8+: It's all in the details

BEZEL-LESS BATTLE Xiaomi Mi Mix 2 vs. Samsung Galaxy S8+: It's all in the details Wednesday, Oct 4, 2017 at 1:14 am EDT The Galaxy S8+ is still the best Android phone available today, but the Mi Mix 2 has a lot going for it. The  Galaxy S8+  is going strong five months after its release, with the phone  breaking Samsung's sales records . The South Korean manufacturer introduced the Infinity View display with the Galaxy S8 series, offering a dual curved display with minimal bezels at the top and bottom. The 6.2-inch Super AMOLED display on the phone is one of the best available on a phone today, and coupled with a class-leading camera, it's easy to see why the S8+ is so popular. Xiaomi, for its part, attracted considerable attention with the Mi Mix last year, and the company has refined the bezel-less formula with the  Mi Mix 2 . Xiaomi retained the razor-thin bezels, but tweaked the overall design aesthetic to make the Mi Mix 2 much more conducive for everyd...
Post a Comment
Read more