Declining international oil prices spell good omen for pakistan

October 24, 2018 (MLN: Sentiments of merriment are currently dominating Pakistan’s domestic markets as the global oil prices have tumbled by over 10% over the last 20 days.

On October 3, 2018 the Brent futures closed at $85.83 per barrel, which has been recorded as the highest peak since June 2014. The Brent futures as of now stand in at $76.7 per barrel.

On the other hand, Prime Minister Imran Khan has secured a valuable bailout package from Saudi Arabia which ensures a deposit of USD 3 billion for a period of one year as balance of payment support.

In addition to this, it has been decided that a one year deferred payment facility for import of oil, up to USD 3 Billion, will be provided by Saudi Arabia.

As an aftereffect of the same, Pakistani rupee has appreciated against US dollar at the interbank market.

The collective impact of these events will lay off considerable burden from Pakistan, by assisting the country in supporting its import bills and reduce its current account deficit.

Moreover, given that additional financial assistance from China is locked in soon, Pakistan’s Current Account Deficits will reduce further.

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