Finance: Time to rethink strategies

Pakistan has made every effort to secure the last tranche worth $1.1 billion of a $6.5bn International Monetary Fund (IMF) loan stalled since November last year. It hopes to get the tranche by the end of June, when the loan programme is due to expire. However, Finance Minister Ishaq Dar is confident that the country will not default even if the IMF money does not come in. He has told the nation that a plan B is in place. Mr Dar also reiterated this during a recent meeting with the US Ambassador Donald Blome without sharing the details. Making an Eastward-looking economic policy is one thing. But being able to implement it and endure transitional pains is another. How political transitions in the near and distant future will affect an Eastward-looking economic policy is a million-dollar question. The foreign exchange crisis is deepening day by day. On June 16, the State Bank of Pakistan’s (SBP) forex reserves fell to $3.54bn, which is insufficient to cover goods’ import bill for even a month. Banks are reluctant to open new import letters of credit (LCs), even for food imports. Obtaining foreign exchange from banks for clearing previously opened LCs has also become too difficult.