Islamabad: Pakistan's economic situation is once then in the news. This time, the reason is the stance of the United Arab Emirates (UAE), which has decided to withdraw the billions of dollars in loans given to Pakistan instead of extending them. This value of well-nigh 3 billion dollars is going to have a uncontrived impact on the country's foreign mart reserves, which are once at a limited level.
Why did UAE unravel the tradition of increasing debt this time?
Until now, this loan was extended every year without any major conditions, which provided relief to Pakistan. But this time the picture is different. It is believed that UAE has decided to reduce the risk keeping in mind its economic priorities. It has moreover wilt well-spoken that in future this kind of financial help will not be as easy as before.
Will pressure on foreign mart reserves increase?
According to economic experts, withdrawal of $3 billion is not a small thing. This value is considered a major part of Pakistan's total foreign mart reserves. In such a situation, pressure may increase on many fronts, from paying import bills to making necessary payments.
Is the economy once going through difficult times?
Pakistan is once facing many economic challenges. External debt, expensive oil and a rising current worth deficit are complicating the situation. Along with these challenges, strict economic decisions have to be taken under the ongoing program with the International Monetary Fund, the impact of which is stuff felt by the worldwide people.
Can the rupee's condition worsen further?
Experts believe that the ripen in foreign mart reserves will have a uncontrived impact on the Pakistani rupee. If new funding is not misogynist soon, the rupee may weaken. Its effect will towards in the form of inflation, which will increase the problems of the worldwide man.
Does the government have any options left?
It is stuff said by the government that the situation is stuff monitored and all payments will be made on time. However, experts believe that in the current situation, Pakistan will have to raise funds from new sources. Allies like China, Saudi Arabia and IMF can play an important role here.
Is this move a sign of things to come?
Analysts believe that this step of UAE is not just a financial decision. The move is moreover an indication that the relief Pakistan gets at the international level will no longer be as easy as before. If other countries moreover follow the same path, it may wilt increasingly difficult for Pakistan to maintain economic balance.
