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Fitch and Moody’s expect IMF to provide funds to Pakistan in third quarter

IMF loan can unlock more financing from other sources – Fitch and Moody website
  • Pakistan expected to receive $1.2bn from IMF in third quarter.
  • IMF loan can unlock more funding from other sources, says Fitch
  • Moody’s says risk that Pakistan will not complete IMF assistance package is on flaw.

Pakistan is expected to receive $1.2 billion from the International Monetary Fund, which could help relieve tension on currency and bonds of the country, according to Fitch Ratings and Moody’s Investor Service, bloomberg informed on Wednesday.

“We assume that the IMF board OK of Pakistan new agreement at the staff level,” said Krisjanis Krastins, Fitch’s Hong Kong expert. director. “This will unlock significant additional funding from the IMF and other multilateral and bilateral sources, as well as provide significant momentum market confidence.”

pakistani rupee fell more than his peers in frontier markets such as dong and togrog.

Fitch and Moody’s expect IMF to provide funds to Pakistan in third quarter

Pakistan’s currency and bonds have taken a beating this month as investors concerned that political confusion will delay the IMF support for country. The nation is trying hard to avert fear that it will follow Sri Lanka is in default year, with in government work to protect billions of dollars from a Washington lender and countries like China and Saudi Arabia.

According to Grace Lim, Sovereign analyst with Moody’s in Singapore, IMF will provide funds in third quarter. Nonetheless, risk that Pakistan will not complete IMF assistance package is on reverse side as government According to her, it may be difficult to implement measures to increase revenues.

“Pakistani ability to complete in current program and maintain reliable policy path which supports additional funding remains extremely uncertain,” Lim told Bloomberg, “while higher inflation and higher cost of life add to social and political risks.

Meanwhile, Prime Minister Shehbaz Sharif government is dealing with other obstacles. The Supreme Court canceled the elections, which should have been elected ruling alliance candidate for head minister of largest province in the country with reason for opposition led by former Prime Minister Imran Khan to resume calls for early election.

Dollar bonds maturing in 2031 were listed 0.4 cents lower at 50.67 apiece. dollar while the rupee dropped to new low, falling 1.5% to 236.34%. dollar.

According to people habitual with situation, the IMF is seeking guarantees from Saudi Arabia and other countries what they will follow through on its funding commitments pending approval of the loan to Pakistan. Fitch Ratings has downgraded the outlook on Pakistan’s credit rating to negative. last a week and Moody’s did the same in June.

“The IMF loan is a high probability eventCarl Wong said. head of fixed income in Avenue Asset Management in Hong Kong. “But the likelihood that Pakistan will be able to out of trouble 50:50 like the IMF just separately of the equation.”

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Derrick Santistevan
Derrick Santistevan
Derrick is the Researcher at World Weekly News. He tries to find the latest things going around in our world and share it with our readers.

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