Reuters: Pakistan’s full-blown economic turmoil, from its biggest ever currency devaluation to a rash of emergency spending cuts, offers the clearest sign yet that the nuclear-armed nation faces the risk of a default unless it receives massive support.
Pushed to the brink by last year’s devastating floods, the South Asian nation has reserves of just $3.7 billion remaining, or barely enough for three weeks of essential imports, while hotly contested elections are due by November.
It desperately needs the International Monetary Fund to release an overdue tranche of $1.1 billion, leaving $1.4 billion remaining in a stalled bailout program set to end in June.
Although an emergency IMF mission has arrived in Pakistan, there are no guarantees amid a growing number of headaches after November’s suspension of disbursements from the current package, which was topped up to $7 billion after the floods.
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