KARACHI: Finance minister Ishaq Dar said on Wednesday Pakistan would not default on its international obligations despite the economy being in a “tight situation.”
Pakistan’s economy is facing a severe balance of payment crisis. Central bank reserves have fallen to barely enough for a month of imports.
But speaking at an event via video link at the Pakistan Stock Exchange, the finance minister said the government had arranged $31 billion required to get through fiscal year 2023.
“Pakistan will not default and that I can prove,” Dar said. “It’s been three months since I took office and we are listening every day that there is going to be a default.”
The country’s economy, he conceded, was in a ‘tight situation’ but his government would steer Pakistan out of the crisis.
“We are once again stuck in tight economic situation,” Dar said. “We are a resilient nation and we would survive the ongoing crisis and return to progressing path.”
Dar also discussed the issue of currency exchange rate disparity, blaming it on the smuggling of dollars to a neighboring country, in a veiled reference to Afghanistan: “The law enforcement agencies are working to stop the smuggling of currency and we hope that this issue would be resolved.”
With the IMF’s ninth review pending since September, Pakistan has desperately been scrambling to secure financing to meet external payment obligations for the current financial year.
Ahead of the review, Pakistan has been trying to approach allies to seek financial support, and Dar has said earlier that he would expect to get $3 billion from a “friendly country.”
The IMF approved seventh and eighth reviews together in August of Pakistan’s bailout program agreed in 2019, to allow the release of over $1.1 billion.