Pakistan is in danger of defaulting on its debt, with an International Monetary Fund bailout programme stalled since November, while a bruising political battle is raging between the government and former prime minister Imran Khan. Dar said that the crisis had been compounded by a recent Supreme Court order striking down plans to delay elections to two provincial assemblies scheduled for next month. The order has created a standoff between the government and the court. "We are stuck in a strange mess as a country… so under these circumstances, on the orders of the prime minister, I have dropped plans to be there [in Washington] physically," Dar said in a televised address. The minister rejected reports of the canceled trip being linked to a holdup in Pakistan's IMF bailout programme. He added that a "constitutional crisis" was created by the Supreme Court, which has demanded that the government provide 21 billion Pakistani rupees ($74 million) to the election authorities by Monday to conduct the polls. IMF BAILOUT Dar said that Pakistan, on its part, had completed all requirements of the IMF's programme review for the release of over $1.1 billion in critical funding for the cash-strapped country.
He said all that remained was a confirmation by one country that it would provide Pakistan $1 billion to shore up its external account requirements. Another country had already confirmed it would provide $2 billion, he added. While Dar did not name the two countries, Pakistan's junior finance minister on Thursday said Saudi Arabia had conveyed to the IMF its commitment to provide financing to Pakistan. Local media has widely reported that $2 billion have been committed by Saudi Arabia, while a confirmation of $1 billion was awaited by the United Arab Emirates.
The minister said once the $1 billion was confirmed, a staff
level agreement would be reached. He denied that there were any
other pending issues.
Pakistan is in dire need of funds with its foreign exchange
reserves hovering around $4.2 billion which provides barely one
month of import cover.
($1 = 283.5000 Pakistani rupees) (Reporting by Gibran Peshimam; Editing by Toby Chopra and Christina Fincher)
