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NOTES
•Pakistan’s central bank recently devalued the Pakistani rupee for the third time in six months,
stoking concerns that the country may have to go to the IMF for a bailout.
(Speculations about Pakistan going to the IMF for borrowing loans since 2013.)
NOTES
While a stronger dollar benefits some economies, it hurts others, especially developing countries. Argentina’s peso has depreciated by about 25 percent this year, while Turkey’s
currency, the lira, has also suffered a bruising year, falling more than 15 percent against the US dollar in 2018.
Many other emerging economies such as Brazil, Indonesia, South Africa and India have also had a hard time with their currencies.
A BALANCE OF PAYMENTS CRISIS LOOMS
• Since gaining independence in 1947, Pakistan has endured significant periods of military rule. However, for the last few years, it has been governed by the democratically elected governments of three different political parties: the PML-Q, PPP and PML-N.
• I am not biased or affiliated with any political party, but having a commitment to democracy and free speech, I must point out what the word on the street is: these three governments have
disappointed the people of Pakistan.
IMF OR CHINA? WHO WILL BAILOUT PAKISTAN’S ECONOMY FROM LATEST
CURRENCY CRISIS?
• Between 2001 and 2013 Pakistan turned to the IMF three times. In fact, there were as many IMF bailouts of the country over that period as there were World Cups.
BASICS
•Pakistan was already spending 45% of its GDP to repay loans.
•Now Pakistan has over 22.8 Trillion rupees debt. Now that’s too much for a $300 Billion economy to handle.
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