According to a report published by Bloomberg on Friday, increased political unpredictability in Pakistan is “probably one of the reasons” the International Monetary Fund (IMF) is reluctant to restart the delayed bailout program.
According to Ankur Shukla and Abhishek Gupta of Bloomberg Economics, “Capital is fleeing Pakistan because there is a growing risk that the IMF will not deliver a bailout, which is needed for the country to avoid default in the fiscal year starting from July”.
The comments come at a time when Pakistan and the IMF are still in negotiations to restart the multibillion-dollar project that has been on hold since November of last year.
The memo stated that “political unrest is probably one of the reasons the IMF is hesitating.”
The newspaper noted that after Khan’s detention last week, the rupee fell to a record low of 299 per dollar, but that it later recovered some losses and returned to 285 when he was freed.
If Khan and the government continue to argue, or if the IMF decides not to offer loans, “the currency will probably depreciate even more,” it continued.
Following Imran Khan’s detention, Pakistan experienced a new round of unrest last week, with demonstrators looting both public and private property. As a result, the government sent army forces to two provinces as well as the federal capital.
According to police and hospitals, at least nine individuals died as a result of the rioting, while hundreds of police personnel were hurt.
