This could leave the economy in doldrums that might lead the government to approach the IMF
LAHORE: Pakistan has secured a $1 billion loan from the Development Bank of China, with another $0.5 million yet to be received from another financial institution of the country. The government in order to stabilise its dwindling foreign exchange reserves has resorted to the same old strategy of securing loans, however, this time around it’s not the IMF but another financial organisation. All this is being done to make the foreign exchange reserves cross the mark of $11 billion. Pakistan’s foreign exchange reserves have fallen drastically because of the expensive imports that have additionally strained the already devalued currency.
Yet, this approach may not prove to be a wise move in the long run, given the stringent conditions that would be attached to the loan. Even if the government artificially manages to bring foreign exchange reserves at a stable level, it will be a temporary measure. This could leave the economy in doldrums that might lead the government to approach the IMF or the World Bank once again.
Shoaib Imran
Published in The Express Tribune, May 3rd, 2018.
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