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HomeBusinessIATA urges Pakistan to release over $700 million in blocked airline funds...

IATA urges Pakistan to release over $700 million in blocked airline funds amid economic crisis

The International Air Transport Association (IATA), a global airlines trade body, urged Pakistan on Tuesday to eliminate obstacles preventing airlines from repatriating ticket revenues.

“Pakistan and Bangladesh are ranked highest in the world in terms of funds which are blocked. So I would really encourage these countries to make sure the airlines get these funds,” stated Xie Xingquan, IATA’s regional vice president for North Asia.

“I am happy to see that some countries have already taken some actions – to give this a priority allowing airlines to take funds back to their home countries,” he added. According to IATA, Pakistan and Bangladesh collectively owe over $700 million in blocked airline funds.

The State Bank of Pakistan (SBP) currently holds reserves of just above $9 billion, which covers around two months of imports.

In April, IATA had called on Pakistan to release airline revenues immediately, citing violations of international agreements.

“The situation has become severe with airlines unable to repatriate over $720 million ($399 million in Pakistan and $323 million in Bangladesh) of revenues earned in these markets,” IATA said in a statement at the time.

“The timely repatriation of revenues to their home countries is critical for payment of dollar denominated expenses such as lease agreements, spare parts, overflight fees, and fuel,” emphasized Philip Goh, IATA’s Regional Vice President for Asia-Pacific.

Read more: Pakistan’s annual trade deficit shrink

Representing around 320 airlines that account for 83% of global air traffic, IATA also urged Pakistan to simplify the “onerous process” of repatriation. Pakistan’s $350-billion economy faces a chronic balance of payments crisis, with nearly $24 billion in debt and interest repayments due over the next fiscal year.

Additionally, Pakistan is seeking a new long-term, larger loan from the International Monetary Fund (IMF) to follow up on the Stand-By Arrangement reached last year.

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