The experts have been warning Pakistan to be cautious about CPEC related Chinese loans to Pak as its economy was not resilient enough to absorb sudden inflow of the foreign direct investment but Pak government preferred to ignore it due to pressure from China. A sudden dip in the rupee value has forced the Pak Finance Minister Ishaq Dar to sumon a report from Governor of State Bank of Pakistan (SBP) to explain the sudden dip in the value of Rupee within ten days. The minister took notice of the fall in the currency against US Dollar by more than three percent on July 5. Last month, Dar had rejected perception of the immense increase in foreign debts and said that at least 147 budget recommendations were forwarded to planning division. He said that budget deficit is to be cut to four percent from the previous eight percent. The finance minister had made the claim days after federal budget for the financial year 2017-18 was laid out by him the National Assembly.
Huge influx of Chinese money has created a bubble like formation in Pakistan’s stock markets, as KSE recorded highest gains in Asian markets. However, the euphoria has been punctured with the Pakistani rupee losing its value in the sharpest dip so far in its history. Pak Government and the Army are projecting CPEC as a game changer and the first change in the game is visible now.