Another bad news for the beleaguered Pakistani economy. After a sharp decline in foreign exchange reserves, Pakistan is also becoming unable to repay its loans. Its economy faces substantial credit risk. Meanwhile, New York-based global rating agency Fitch has warned that Pakistan could soon become a loan defaulter if the situation does not improve.
In its report, Fitch said that loan default is a real possibility. Fitch downgraded Pakistan's long-term foreign currency issuer default rating (IDR) to 'CCC-' from 'CCC+'. This means that its liquidity and policy risks have further deteriorated.
Pakistan's crisis deepens
Fitch said the downgrade reflects a sharp deterioration in external liquidity and funding conditions. Pakistan's foreign exchange reserves have seen a major decline in the recent past. Fitch has said in its report that the situation does not look very pleasant, especially in the fourth quarter of 2022, given the falling reserves, large-scale decline, current account deficit (CAD), external debt, and foreign reserves of the Central Bank of Pakistan. Quarterly.
Risk of becoming a loan defaulter
The agency said that Pakistan's foreign exchange reserves are expected to remain at a low level. However, due to the anticipated currency inflows and the recent removal of the exchange rate cap, there is scope for improvement in the remaining months of FY23. Fitch said it expected Pakistan to complete the ninth review of the International Monetary Fund (IMF) program.
Pakistan on the brink of disaster
Pakistan has been grappling with instability in recent days stemming from an economic crisis, last summer's devastating floods, and an increase in terrorist attacks across the country. A significant USD 1.2 billion portion of the 2019 bailout was stuck since December last year. IMF urged Pakistan to raise more cash.
Pakistan held ten days of intense talks with the IMF delegation in Islamabad, but could not reach an agreement. The IMF and the Pakistan government resumed talks virtually on Monday, hoping to reach an agreement soon. Will give impetus to the country's sick economy.
Pakistan's foreign exchange reserves stood at around US$2.9 billion as of February 3, according to estimates by the country's central bank, which was not enough even for three weeks of imports.
The political atmosphere is heated regarding the Sandeshkhali violence. The ruling party and the
Budget 2024-25: Startups hope to overcome funding shortages, get tax concessions and boost R&D
Finance Minister Nirmala Sitharaman made several announcements for startups in the interim budget
Thousands of North Koreans and people in South Korea, Japan, and China may have been exposed to r
Celebrations have started once again at Mukesh Ambani and Nita Ambani's house. Soon the
Sahara Refund Portal Sahara group's investors have now started getting their money back. Today Un
Former Indian spinner Ravichandran Ashwin surprised everyone by announcing his retirement from th
The heat of politics of opposition parties, which started after Home Minister Amit Shah's stateme
Thirty-one hills of the Aravalli range, which are vital to the entire NCR region, including Delhi
Prime Minister Narendra Modi is on a tour of South India for preparations for the Lok Sabha elect
A big claim has been made about India in a United Nations report. It has been said that by 2050,
