Pakistan in a critical balance of payments situation: ADB
ADB's country director says Pakistan will need up to $9 billion from the IMF to cushion the economy.
Werner Liepach, country director of the Asian Development Bank in Pakistan speaks during an interview with Reuters in Islamabad March 6, 2013. PHOTO: REUTERS
ISLAMABAD:
Pakistan has reached a critical balance of payments predicament and will need another package from the International Monetary Fund before the end of the year to avert a crisis, one of the country's biggest lenders to the country said on Wednesday.
The Asian Development Bank's country director, Werner Liepach, also told Reuters in an interview Pakistan will need up to $9 billion from the IMF to cushion the economy.
Pakistan currently has enough hard currency to cover about two months of imports. Asked if Pakistan, a key US ally, was in a balance of payments crisis, Liepach said:
"It depends how you define a crisis. Maybe we are already in a crisis."
In 2008, Pakistan averted a balance of payments problem by securing an $11 billion IMF loan package. The IMF suspended the programme in 2011 after economic and reform targets were missed. Some analysts have since warned about the prospect of a new balance of payments crisis.
Werner predicted Pakistan would have to go back to the IMF for another bailout to avert a new crisis, this time an amount of up to $9 billion.
The ADB, along with the IMF, has been pushing Pakistan's government to carry out politically-sensitive reforms to strengthen the economy and widen the country's revenue base.
The country owes the IMF just over $6.2 billion. It is due for a big repayment in the first six months of 2013, a schedule that will strain reserves and may accelerate the slide of the rupee currency.
Pakistan has reached a critical balance of payments predicament and will need another package from the International Monetary Fund before the end of the year to avert a crisis, one of the country's biggest lenders to the country said on Wednesday.
The Asian Development Bank's country director, Werner Liepach, also told Reuters in an interview Pakistan will need up to $9 billion from the IMF to cushion the economy.
Pakistan currently has enough hard currency to cover about two months of imports. Asked if Pakistan, a key US ally, was in a balance of payments crisis, Liepach said:
"It depends how you define a crisis. Maybe we are already in a crisis."
In 2008, Pakistan averted a balance of payments problem by securing an $11 billion IMF loan package. The IMF suspended the programme in 2011 after economic and reform targets were missed. Some analysts have since warned about the prospect of a new balance of payments crisis.
Werner predicted Pakistan would have to go back to the IMF for another bailout to avert a new crisis, this time an amount of up to $9 billion.
The ADB, along with the IMF, has been pushing Pakistan's government to carry out politically-sensitive reforms to strengthen the economy and widen the country's revenue base.
The country owes the IMF just over $6.2 billion. It is due for a big repayment in the first six months of 2013, a schedule that will strain reserves and may accelerate the slide of the rupee currency.