On Monday, Aisha Ghaus Pasha, the State Minister for Finance and Revenue, assured the public that the federal government has no intention of freezing foreign currency accounts, despite Pakistan’s significant dollar crunch. Addressing journalists outside the parliament in Islamabad, the minister dismissed any proposals of taking such action.
It’s pertinent to recall that back in May 1998, then-prime minister Nawaz Sharif’s government had frozen all foreign currency accounts following Pakistan’s inaugural nuclear tests. The country’s foreign reserves are worryingly low, offering coverage for less than a month’s imports. With twin deficits and soaring inflation destabilizing the economy, the risk of default is high.
Amid the ongoing financial crisis, Pakistan remains in a standoff with the International Monetary Fund (IMF) over a much-needed bailout program. According to the state minister, the government has shared the fiscal year 2023-24 budget figures with the IMF, and negotiations are ongoing with the State Bank of Pakistan (SBP).
Finance Minister Ishaq Dar recently presented an Rs14.5 trillion (approximately $50.5 billion) budget, over half earmarked to service a debt of 7.3 trillion rupees. However, experts are skeptical about the budget’s potential to unlock the desired IMF loan. “We have urged the IMF to conclude the ninth review at the earliest. We are under significant pressure due to the time constraints for completing this review,” Pasha pointed out.
Pasha added that she doesn’t anticipate the Fund having issues with the budget. She revealed that IMF Managing Director Kristalina Georgieva had reassured Pakistani authorities of the Fund’s commitment to completing the latest review. “All our friendly countries have also assured their support to the IMF,” the state minister said, signifying international solidarity amidst Pakistan’s economic crunch.