Cash-strapped Pakistan's deepening crisis douses hopes for IMF assistance

Lahore, May 10

The political crisis engulfing Pakistan is eroding hopes that the South Asian country can get its much needed programme with the International Monetary Fund back on track soon and escape a full-blown debt crunch, analysts said.

7 persons have died so far in the last 24 hours after Imran’s arrest

300 injured in clashes between security forces & ex-PM’s supporters

1,150 PTI supporters have been arrested so far

Violent clashes between supporters of Imran Khan and police broke out across the country after Pakistan’s anti-corruption agency arrested the former prime minister on Tuesday.

The latest rupture in Pakistan’s febrile politics comes as the 230-million-population nation prepares to hold tightly fought elections in the autumn while facing its worst economic crisis in decades, with dwindling reserves and a stalled USD 6.5 billion IMF programme that is expiring in June and scarce other financing sources in sight.

“With protesters on the streets, the IMF will be even more wary about restarting the deal,” said Gareth Leather, senior economist for Emerging Asia at Capital Economics.

The turmoil since Khan was ousted just over a year ago has scarred the country’s economy and markets. Pakistan’s rupee has lost nearly 50 per cent over the past 12 months. The main stock index has suffered a double-digit decline over the same period.

On Wednesday, the rupee tumbled to a fresh record low of 289.5 to the dollar. The country’s international bonds, already in deeply distressed territory of as little as 32 cents, dropped more than 1 cent in the dollar on the day.

JP Morgan analyst Milo Gunasinghe said little relief from political uncertainty was in sight while the IMF programme remained stalled.

“The latest developments likely dampen any prospect of a political breakthrough across both sides,” Milo said. — Reuters

US, UK call for peace

• The United States on Tuesday called for respect of democratic principles and the rule of law in Pakistan
• “We do not have a position on political dynamics. We seek respect of democracy,” White House said
• Britain’s Foreign Minister James Cleverly said, “The UK has long standing ties with Pakistan. We want peace in that country.”

PM Sharif, son ‘innocent’

PM Shehbaz Sharif and his son Hamza were declared “innocent” in a money laundering case as per reports. The case was filed in 2020, which alleged that Shehbaz and his family members were involved in illegal transfer of funds through fake accounts.