ISLAMABAD: Many international economic think-tank believe that Pakistan will evade short-term default after obtaining loan from the International Monetary Fund as the executive board of the fund is holding its meeting today (Aug 29) in Washington to consider for approval resumption of loan to Pakistan.
After the board’s approval, Pakistan will receive $1.17 billion from the IMF within this week.
The Columbia Threadneedle Investments, Tellimer Limited and Natixis SA predictions believe that Pakistan will get approval of $1.17 billion loan approval from the IMF board on Monday.
The leadership expects the Washington-based lender to resume the six months-long stalled $6 billion bailout programme; however, a rally in the nation’s assets may fizzle out amid escalating political tensions.
“I do think the bulk of the market rally is already in the price,” said Eng Tat Low, an emerging-market sovereign analyst at Columbia Threadneedle in Singapore.
“I expect the next 12 months to be challenging with the general elections looming while the risk of worsening political backdrop is definitely still considerable and elevated.”
Pakistan’s dollar bonds have been the top performers in emerging markets in August after Belarus. Meanwhile, the rupee also soared above its peers as investors cheer the prospect of IMF funds.
However, the development on the political front can put fragile financial stability at risk as supporters of Imran Khan stage protests.
