By Staff Reporter
ISLAMABAD: The government said it has no plans to freeze foreign currency accounts as its central bank’s reserves fell to $3.9 billion, enough to cover less than a month of imports.
The country is facing its worst economic crisis ever, with soaring inflation and a plunging currency. It is seeking to revive a $6.5 billion bailout program from the International Monetary Fund that has been stalled for months over disagreements on financing gaps for the next fiscal year.
The government has been pursuing the IMF for the completion of the ninth review 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 agreement after months of talks. The programme will expire at the end of June.
The situation has evoked memories of May 1998, when then-Prime Minister Nawaz Sharif froze all foreign currency accounts after Pakistan tested nuclear weapons and faced international sanctions.
“We do not plan on freezing foreign currency accounts. There have been no proposals to take such an action,” State Minister for Finance Aisha Ghaus Pasha told reporters in Islamabad on Monday.
“Our first priority is to accomplish the ninth review of the IMF program before the expiry of Extended Fund Facility on June 30.”
Pasha said the government has shared all its budget plans with the IMF and is urging the lender to complete the ninth review of the program as soon as possible.
The government last week unveiled a Rs14.46 trillion ($50.4 billion) budget for the next fiscal year, aiming for a 23% increase in tax revenue and a 3.5% economic growth.
“We have asked the IMF to complete the ninth review at the earliest,” Pasha said, adding that “friendly countries” have assured the IMF of their financial support to Pakistan.
She however said the IMF’s mission in Pakistan had not contacted the government after the budget presentation.
Saudi Arabia and the UAE have pledged $2 billion and $1 billion respectively to help Pakistan bridge its external financing gap and resume the IMF program, which has been on hold since November.
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