Record Pakistan Reserves Mask Risks of Needing More IMF Aid
- Debt, grants account for at least 50 percent of FX holdings
- Lower oil prices cushion Pakistan; medium-term risks seen
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Pakistan’s record foreign-exchange reserves are masking economic weaknesses that risk pushing the nation toward more aid from the International Monetary Fund.
At least half of the country’s $20 billion stockpile comprises debt and grants, almost all of which have flowed in since Prime Minister Nawaz Sharif took office in May 2013. That money could leave quickly as Pakistan begins repaying the IMF in 2016 or if oil prices surge, leading to another balance-of-payments crisis.