The State Bank of Pakistan’s (SBP) foreign reserves fell below $3 billion following the repayment of a $1 billion Chinese loan.
According to sources familiar with the situation, Pakistan paid a $1 billion Chinese loan, which caused the SBP’s holding reserves to plummet to catastrophic levels.
According to the sources, the first interaction was established between Finance Minister Ishaq Dar and IMF’s Nathan Porter following the release of the FY2023-24 budget. During the virtual conference between Ishaq Dar and the IMF, no significant progress was made.
According to the sources, another meeting with the IMF will be conducted tomorrow to address the international lender’s concerns.
Meanwhile, in an interview with Bloomberg, Moody’s Investor Service analyst stated that Pakistan is on the verge of “default,” and that Pakistan cannot complete the current IMF loan programme until June 30.
Moody’s indicated earlier this month that Pakistan could default without an IMF rescue since its funding options beyond June are unknown.
According to Bloomberg, Grace Lim, a sovereign analyst with the Singapore-based rating firm, stated that Pakistan’s funding choices beyond June are highly unknown, and the South Asian country may “default” due to its extremely low reserves.