KARACHI: As an alternative to the International Monetary Fund’s (IMF) bailout program, Pakistani currency dealers have offered to arrange about $24 billion to shore up the country’s foreign exchange reserves for the next two years “in the larger interest of the country,” an official said on Friday.
Cash-strapped Pakistan is currently in talks with the IMF for the completion of the ninth review of the $7 billion bailout program signed in 2019. However, no progress has been made until now to reach a staff-level agreement, even as the government has implemented several harsh conditions to fulfill the lender’s requirements.
Pakistan desperately awaits the disbursement of $1.2 billion from the IMF under the loan program since it would boost the country’s low foreign exchange reserves which currently stand at $4.2 billion, barely enough to cover one month of imports.
The country’s currency dealers have offered to arrange the much-needed dollars in this context through a swap agreement with overseas and local Pakistanis to steer the economy out of the current crisis.
“We offered the government six months back to arrange $24-25 billion through outright purchases from Pakistanis at least for two years,” Malik Bostan, president of the Exchange Companies Association of Pakistan (ECAP), told Arab News on Friday.
Bostan said he repeated the offer during a recent meeting with the members of the Senate Standing Committee on Finance in Islamabad.
“The companies have offered to arrange funds of $1 billion per month for the government so that the country can get rid of the IMF program,” he said, adding that the exchange companies were already contributing $400 million per month to the interbank market.
Asked to further elaborate the plan, the ECAP president said currency dealers would approach overseas and local Pakistanis and offer currency swap agreement for the well-being of the country.
“Under the agreement, we will take loans for a certain agreed period and offer them the current exchange rate,” he explained. “They will benefit from the exchange rate fluctuations, and appreciation at the end of the contract term.”
Bostan said the idea to raise dollars for Pakistan was not new as a similar approach was adopted back in 1998 through which $10 billion were raised with the permission of then prime minister, Nawaz Sharif, and central bank governor, Muhammad Yaqub.
“We had toured Saudi Arabia, the United Arab Emirates, and the United States, and approached Pakistanis, and they had responded well,” he continued. “The country is still reaping the benefit of 1998 fundraising.”
The ECAP official said the exchange companies needed the government’s approval to implement the proposed financing arrangement which required direct dollar purchases from abroad and people at home.
While Bostan said the government’s nod will allow the country to get the much-needed funds, Pakistani economists termed the idea “unsustainable” and risky which could put the country back on the Financial Action Task Force’s (FATF) radar.
“The financing solution proposed by the exchange companies may provide short-term relief, but it is not a long-term solution and there is a risk of putting the country back on the FATF watch list,” Dr. Sajid Amin, deputy executive director at the Sustainable Development Policy Institute (SDPI), told Arab News. “The government must stick to the IMF program and complete the reforms that the country needs for its long-term survival.”
Amin said the current IMF program seemed “tough” but it was because the authorities had failed to implement structural reforms which were mutually agreed with the fund.
“We have been playing politics with the IMF program which has delayed the implementation of prior actions,” he continued.
Amin added the conditions seemed tough because of the implementation timeframe which was short.
Pakistan has approached the IMF 23 times in its history to get bailout programs but has only completed one of them.
Pakistan currency dealers offer $24 billion loan to government as alternative to IMF bailout
https://arab.news/5yab5
Pakistan currency dealers offer $24 billion loan to government as alternative to IMF bailout
- Local dealers say financing will be arranged through currency swap agreements with local and overseas Pakistanis
- Economists say the proposed plan is not sustainable and may put the country back on FATF’s radar screen
Pakistan destroyed seven TTP camps in Afghanistan strikes, 80 militants killed — official
- Saturday’s airstrikes followed a series of attacks inside Pakistan amid a surge in militancy
- The Afghan Taliban authorities accuse Pakistani forces of killing civilians in the airstrikes
ISLAMABAD: Pakistan’s airstrikes in Afghanistan destroyed seven Tehreek-e-Taliban Pakistan (TTP) camps and killed over 80 militants, a Pakistani security official said on Sunday, with the Afghan Taliban accusing Pakistani forces of killing civilians in the assault.
Saturday’s airstrikes followed a series of attacks inside Pakistan amid a surge in militancy. Authorities say the attacks, particularly in Khyber Pakhtunkhwa province and the Pakistani capital of Islamabad, were carried out by the TTP and allied groups that Islamabad alleges are operating from sanctuaries in Afghanistan. Kabul denies this.
According to Pakistan’s information ministry, recent incidents included a suicide bombing at a Shiite mosque in Islamabad, separate attacks in Bajaur and Bannu, and another recent incident in Bannu during the holy month of Ramadan, which started earlier this week. The government said it had “conclusive evidence” linking the attacks to militants directed by leadership based in Afghanistan.
“Last night, Pakistan’s intelligence-based air strikes destroyed seven centers of Fitna Al-Khawarij TTP in three provinces of Nangarhar, Paktika and Khost, in which more than eighty Khawarij (TTP militants) have been confirmed killed, while more are expected,” a Pakistani security official, who spoke on condition of anonymity, told Arab News.
An earlier statement from Pakistan’s information ministry said the targets included a camp of a Daesh regional affiliate, the Islamic State Khorasan Province (ISKP), which claimed a suicide bombing at an Islamabad Shiite mosque that killed 32 people this month.
In an X post, Afghan government spokesperson Zabihullah Mujahid said Pakistani forces had violated Afghan territory.
“Pakistani special military circles have once again trespassed into Afghan territory,” Mujahid said. “Last night, they bombed our civilian compatriots in Nangarhar and Paktika provinces, martyring and wounding dozens of people, including women and children.”
The Afghan Taliban’s claims of civilian casualties could not be independently verified. Pakistan did not immediately comment on the allegation that civilians had been killed in the strikes.
In a post on X, Afghanistan’s foreign ministry said it had summoned Pakistan’s charge d’affaires to Afghanistan Ubaid-ur-Rehman Nizamani and lodged protest through a formal démarche in response to the Pakistani military strikes.
“IEA-MoFA (The Islamic Emirate of Afghanistan’s Ministry of Foreign Affairs) vehemently condemns the violation of Afghanistan’s airspace and the targeting of civilians, describing it as a flagrant breach of Afghanistan’s territorial integrity & a provocative action,” it said in a statement.
“The Pakistani side was also categorically informed that safeguarding Afghanistan’s territorial integrity is the religious responsibility of the Islamic Emirate of Afghanistan; henceforth, the responsibility for any adverse consequences of such actions will rest with the opposing side.”
Tensions between Islamabad and Kabul have escalated since the Afghan Taliban returned to power in 2021. Pakistan says cross-border militant attacks have increased since then and has accused the Taliban of failing to honor commitments under the 2020 Doha Agreement to prevent Afghan soil from being used for attacks against other countries. The Taliban deny allowing such activity and have previously rejected similar accusations.
Saturday’s exchange of accusations marks one of the most direct confrontations between the two neighbors in recent months and risks further straining already fragile ties along the volatile border.
