Fitch Ratings, an independent rating firm for financial institutions and world economies issued a statement which said that the current situation of Pakistan’s External Finance is still manageable. The agency said that the current widening of fiscal account deficit and depleted foreign exchange reserves are not un-manageable, and according to Finch, Pakistan will not have face any short-term external-finance raising difficulties. The report further mentioned IMF’s three year support to Pakistan’s economy had strengthened the macroeconomic factors of Pakistan and helped Pakistan with its declining Foreign Reserves.
However, the report also took into account the recent situation of current account deficit and the external pressure posed by the current situation. Foreign reserves, for instance had fell for five consecutive months from October. The Current Account deficit had reached a total of USD 2.6 billion in January- March 2017, its highest levels since September-December 2008.
The report associated the deficit situation to decline in remittances, rise in global oil prices and imports associated with infrastructure projects in the CPEC.
Furthermore, it mentioned that the situation is farther away from the one faced by Pakistan prior to the IMF agreement in 2013. It also stated that The State Bank of Pakistan has been in successful in keeping Pakistani Rupee stable against the US dollar over the last 18 months, even when the dollar appreciated. In comparison to that there was a sharp decline in the years leading up to IMF agreement.
