ISLAMABAD  -  The Pakistan Tehreek-e-Insaf (PTI) led coalition government has planned to borrow $12-$15 billion from various financial institutions, friendly countries and issuing bonds in the international market in next eight months to avert the balance of payment crisis.

Pakistan is in quite a tricky position as it needs at least $12b in the current fiscal year to keep economy floating and it may not be possible with going for the International Monetary Fund bailout package. Moreover, the uncertainty also hangs on the said bailout package with the United States pressurising the IMF not to award Pakistan borrowing in wake of Chinese debts.

Pakistan had already approached International Monetary Fund (IMF) for a bailout package and an IMF team would visit Pakistan from November 7 to finalise the loan programme. The finance ministry officials are of the view that IMF bailout package would be $12 billion for three years, indicates that country to receive $4 billion every year in different installments if Fund approves the loan.  This amount would help a little to ease pressure on the economy and the government would have to look beyond the IMF to get out of the economic crisis and resolve the balance of payment issue.

The finance ministry officials also revealed that Pakistan is in touch with China and Saudi Arabia for some financial assistance. Pakistan would ask these friendly countries to deposit a certain amount in State Bank of Pakistan’s account to increase its depleting foreign exchange reserves, they added.

The government is likely to float the proposal during the upcoming visits of PM Imran Khan to these countries. PM Khan is heading to Saudi Arabia next week to attend an investment conference that also has not come at a good time as the scandal surrounding Saudi Arabian journalist Jamal Khashoggi’s murder has made the event controversial and a string of cancellations from leading policy-makers and corporate chiefs over the issue. But this may lead to further boosting the government’s bid of search of dollars through showing solidarity with the brethren country in time of crisis. PM Khan also visit China in the start of November and would also put up the same request to the Chinese.  “It will be great success for Pakistan if China and Saudi Arabia agree to give at least three billion dollars as stopgap arrangement,” said an official of the ministry of finance.

He further said negotiations had already started with these countries. Taking oil on deferred payment from Saudi Arabia is also included in government’s strategy, he added.

Sources informed that government also is considering launching a Pakistan Diaspora Bond and Eurobond in next couple of months to generate around $2-$3 billion. The government is likely to give advertisements in newspapers for seeking participation in the bidding process for selection of financial advisers in next few weeks.

The PTI-led government would launch investment bonds for overseas Pakistanis. The bond would be alike as the Central Directorate of National Savings (CDNS) launching dollar denominated bond for attracting investment from millions of overseas Pakistanis.

Finance Minister Asad Umar had recently said that Pakistan would acquire another $5 billion from Asian Development Bank (ADB) and World Bank (WB). He further said that Pakistan would take bailout package worth upto $12 billion from International Monetary Fund (IMF) in next three years to ‘restore confidence of investors in the market.

It is worth mentioning here that Pakistan foreign exchange reserves held by the central bank have fallen to $8.1 billion. “During the week ending October 12, 2018, SBP’s reserves decreased by US$219million to US$8,089million, due to external debt servicing and other official payments,” the State Bank of Pakistan stated in a statement.

The International rating agency, Moody’s, has estimated Pakistan’s gross external financing needs for fiscal 2019 to be around $30 billion, of which $7-$8 billion are the government’s external repayments. The financing gap – which excludes foreign-exchange reserves – is likely to total $8-$9 billion; taking into account the government’s borrowing plans and our expectations for capital inflows including foreign direct investment and portfolio flows.