pakistan-near-debt-default

Pakistan near debt default

Barely a month since the presidential election, falling foreign currency reserves have forced PakistanÆs new government to turn to the IMF for a loan.

Edward Russell

October 22, 2008

PakistanÆs foreign reserves have fallen sharply in recent months. At half the level they were a year ago, the country now stands on the precipice of defaulting on its international debt.

In order to avoid a default, PakistanÆs government has turned to the International Monetary Fund IMF for a loan. News reports estimate that Pakistan is seeking between $4 billion and $15 billion in loans from the lender of last resort. Neither Pakistan nor the IMF has confirmed an amount.

According to PakistanÆs central bank, as of October 10, the country had only $7.75 billion in total hard currency reserves. This is down from a six-year high of $15.6 billion last year.

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South Asia