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Pakistan’s economic muddling and the IMF challenge

GS Paper 2

Syllabus: India and its neighbourhood relations, important international institutions(IMF)

 

Context:

  • The Pakistani rupee (PKR) has been falling continuously from 150 in April 2021 to 213 against the dollar on 21 June, an all-time low.
  • Pakistan’s foreign exchange reserves have been depleting during the last one year.
  • According to State Bank of Pakistan data, from $17.2 billion in June 2021, the net reserves with the SBP have come down to $8.9 billion in June 2022.
  • Citing“heightened external vulnerability risk” and the “ability to secure additional external financing,” the rating agency Moody’s downgraded Pakistan’s outlook to negative.

 

Current Affairs

Conditions by the IMF to support Pakistan:

 

Current Affairs

 

Will Pakistan pursue macroeconomic reforms?

 

Current Affairs

 

Insta Links:

To read about the moody rating: click here

To read about IMF: click here

 

Practice Questions

Q. How do rating agencies rate the economic performance of a country. What are its implications? Discuss. (15M)

 

Q. With reference to International Monetary Fund(IMF), consider the following statements:

  1. The IMF gives loans to member countries that are struggling to meet their international obligations.
  2. It is part of the Brettenwood Conference along with the World Trade Organization(WTO).

Which of the statements given above is/are correct?

a. 1 only

b. 2 only

c. Both 1 and 2

d. Neither 1 nor 2

Ans: (a)

Source: The Hindu