Fears mounted over Pakistan’s economic stability before elections this summer as the caretaker government pledged on Tuesday to stem the current account deficit by using rapidly dwindling foreign currency reserves.
There is growing speculation that the government will have to seek a loan package from the International Monetary Fund following the elections, for the second time since 2013, amid fears of a balance of payments crisis.
“We have to finance this gap of the trade deficit of $25 billion by depleting our reserves. There is no other option,” caretaker Finance Minister Shamshad Akhtar told a press conference. “This is a major worry which our government is facing.”
The announcement came hours after State Bank of Pakistan devalued the rupee by 3.7 per cent, the third devaluation since December.