Pakistan Getting More Loans
Pakistan Getting More Loans: Why is the loan only way for the government to get out of fiscal deficits and save the foreign reserves from crashing? Why our economic experts cannot think of a way out instead keep getting money from China or Saudi Arab under “friendly loans”.
And then our government calls it a stable economy; you keep on obtaining loans, you are in a fiscal deficit and you are unable to stabilize the rupee against dollar, and still you are calling it a stable economy is an unanswered question with an unending debate.
Recently State bank of Pakistan has revealed that Pakistan will get a loan of $1 billion from commercial bank of a friendly country to shore up fast depleting foreign currency reserves. After the loan, the reserves would cross $18 billion mark.
The government is all set to “secure commercial loan of $1 billion to $1.5 billion from Chinese banks within the next two weeks”.
The country had already raised $1.77 billion short-term commercial loans from various foreign banks, mainly Chinese, against a target of $1 billion for the current fiscal year of 2017-2018.
With the coming loan deal, total short-term debt might go close to $3 billion mark.
“The planned short-term loan transactions would be meant for two to three years period and efforts would be made to keep the rates low,” an official told The News.
The current account deficit is projected to go up to $16 billion in the current fiscal from $10.4.
As per sources, all requirements for obtaining loan in the range of $1 to $1.5 billion have been completed and it is hoped that this transaction will be done within first two weeks of next month.
The country had already obtained $7.6 billion from multilateral and bilateral creditors in the current fiscal year but the foreign currency reserves held by the SBP continued to decline. SBP states that on 20th April Pakistan’s foreign exchange reserves decreased to $17.13 billion in compared to $17.54 billion in the previous week.
Pakistan requires an immediate injection of $6 billion to $8 billion to keeping its foreign currency reserves floating otherwise rapidly depleting reserves could deepen the crisis in coming months.
Pakistani government also expects slightly over $1 billion from Islamic Development Bank and $1.4 billion from the ADB.
And the government thinks getting more loans will reduce the country’s economic crisis!!!
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