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Article

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A state of uncertainty, almost at the verge of panic, prevails today in Pakistan. Prophets of gloom and doom using social and electronic media are spreading all kinds of fake, negative, partial and partisan stories and numbers. Predictions of default, bankruptcy and similarity with Sri Lanka are jarring the equity, debt and currency markets and pushing the credit default rates on Pakistani bonds in international markets to unprecedented elevated yields, making it difficult to tap these markets. However, one should present the facts and data unvarnished and untarnished. Yes, we are facing a large current account deficit that is putting pressure on our exchange rate and consequently interest rate. In the absence of FDI inflows and large amortization payments, we have to resort to increased borrowing – both short term and commercial – that adds to our already high debt stock and also draws down on our foreign exchange reserves.

Publication Source

The News

Publication Date

5-27-2022

Pages

1-4

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Economics Commons

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