ISLAMABAD: Pakistan’s State Minister for Finance Dr Aisha Ghaus Pasha said on Monday the government was not considering freezing foreign currency accounts as reserves held with the central bank have dwindled to barely $3.9 billion, enough to cover less than a month’s worth of imports.
Pakistan is currently going through its most daunting economic crisis to date, with record-high inflation and a rapidly depreciating currency. The government has been pursuing the International Monetary Fund (IMF) for the revival of a stalled $6.5 billion bailout program to receive a tranche of $1.1 billion to stave off a balance of payments crisis but has been unable to reach a staff-level agreements after months of talks.
The economic crisis has reminded of May 1998, when the government of Prime Minister Nawaz Sharif froze all foreign currency accounts as reserves fell to a critical level after the country tested nuclear weapons, leading to international sanctions.
“We do not plan on freezing foreign currency accounts,” the state minister told media in Islamabad. “There have been no proposals to take such an action.”
Pasha said all budget plans had been shared with the IMF and Pakistan was now pushing the lender to complete the ninth review of the bailout program at the earliest.
The government last week presented a Rs14.46 trillion ($50.4 billion) budget for the next fiscal year, setting a tax collection target of Rs9.2 trillion ($32 billion), 23 percent higher than last year, and envisioning a 3.5 percent GDP growth.
“We have asked the IMF to complete the ninth review at the earliest,” the minister said, adding that “friendly countries” had already given assurances to the IMF to bridge external financing gaps.
Saudi Arabia and the UAE have sent their assurances of $2 billion and $1 billion respectively to the IMF as financial support to Pakistan to revive the bailout program which remains suspended since November last year.
