Dar calls on President Alvi, briefs him on financial and economic outlook

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Finance Minister Ishaq Dar (R) calls on President Dr Arif Alvi on Friday. — Photo by author
Finance Minister Ishaq Dar (R) calls on President Dr Arif Alvi on Friday. — Photo by author

Finance Minister Ishaq Dar on Friday briefed President Dr Arif Alvi on the country's financial and economic outlook, a statement released by the President's Secretariat said.

During the meeting at Aiwan-i-Sadr, they also discussed various financial and economic matters.

Dar informed the president about government measures to provide relief to the people, especially those who were underprivileged or affected by this year's destructive floods.

The meeting comes amid delays in finalising a schedule for formal talks on the overdue ninth review of a $7 billion International Monetary Fund (IMF) loan programme and rising default risk.

On Wednesday, Pakistan's default risk as measured by five-year credit-default swaps (CDS) — insurance contracts that protect an investor against a default — soared to 75.5 per cent from 56.2pc a day ago, according to data provided by research firm Arif Habib Limited.

Pakistan is scheduled to pay $1 billion on Dec 5 against the maturity of five-year sukuk, or Islamic bonds. The finance minister has repeatedly assured sukuk payment, but the international market is not ready to rely on assurances as the country’s economy struggles to avoid default by borrowing more from the markets, donors, commercial banks and friendly countries.

The day-to-day increase in the CDS reflected a grave situation, making it increasingly difficult for the government to raise foreign exchange from markets either through bonds or commercial borrowings.

The country requires $32bn to $34bn this fiscal year to meet its foreign obligations.

Financial experts said the country still needed about $23bn through the remaining fiscal year.

Separately, a senior official told Dawn on Thursday that dates for the ninth review could "not be finalised" during Dar's meeting with IMF’s mission chief to Pakistan Nathan Porter.

The talks, originally due in the last week of October, were rescheduled to Nov 3 and then kept on facing delays amid a lack of clarity on flood-related financial requirements for this fiscal year.

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