ISLAMABAD: In a bid to avert the balance of payment crisis, Pakistan has envisaged ambitious plans for the IMF’s draft Memorandum of Economic and Financial Policies (MEFP) and projected to receive $12 billion inflows from four major avenues including $6 billion in shape of monetary authorization deposits from Saudi Arabia and the UAE and another $4 billion from unidentified avenues in the current fiscal year.
According to the details worked out by the Ministry of Finance which were shared with the IMF in the draft MEFP submitted to the Fund staff last week in order to strike consensus at staff level agreement, Pakistan has prepared a three-year framework and envisaged that the gross financing requirement of the country stood at $21.452 billion for the current fiscal year 2018-19.
They envisaged that this requirement would decrease in next two years hovering in the range of $17 billion per annumbasis in fiscal year 2019-20 and 2020-2021.
The external financing has been worked out by the Ministry of Finance in consultation with other relevant stakeholders and they projected $500 million from the IMF.
Pakistani authorities also projected $700 million through launch of bond but it was not yet ascertained what type of international bond the government wanted to launch to attract multimillion dollars from the potential investors.
However, the Ministry of Finance sources confirmed to The News on Tuesday that Federal Minister for Finance Asad Umar recently chaired a meeting to explore option for launching Pakistan Diaspora Bond under “Pakistan Banao” scheme to attract $500 to $700 million from overseas Pakistanis.
However, the sources said the fan club of PTI living abroad was not so much pleased with the performance of the government. But despite these unfavorable developments, the sources said the government could generate over $300 million if it came up with an incentive-based scheme by offering attractive rates to overseas Pakistanis giving them over and above the CPI-based inflation.
According to official projections, the government estimated that the foreign currency reserves of the country would be standing at $14.856 billion by end of the ongoing fiscal year. The government will have to pay $6.5 billion in shape of amortization of foreign loans and liabilities during the current fiscal year.
The government has projected that China will provide $1.983 billion as bilateral loan during the current fiscal year.
Pakistani authorities, the sources said, had prepared detailed projections of gross financing requirements and outlined all expected inflows in it.
The four major avenues have been identified as they projected $4 billion from unidentified avenues during the current fiscal year. There are expectations that China is going to provide more dollar inflows within the current financial year so the government has projected total inflows of $4 billion in shape of unidentified avenues.
The second projected dollar inflow has been envisaged in shape of Monetary Authorization Deposits to the tune of $6 billion during the ongoing FY2019. Saudi Arabia committed $3 billion for provision of oil on deferred payment and also promised $3 billion deposits for the State Bank of Pakistan (SBP) out of which $2 billion was already provided to Pakistan and remaining $1 billion was expected to be received by next month. The UAE was also in the process of committing same amount of package including $3 billion oil and remaining $3 billion for deposits.
When contacted, Advisor to the Ministry of Finance and official spokesman Dr Khaqan Najeeb said the government had sufficient foreign inflows to manage its financing gap for the current fiscal year.