GENEVA: Pakistan’s core problem is that its international financial reserves have tumbled down from $7.7 billion to $6.5 billion since June 2007, while the value of rupee against dollar eroded by 20 percent in the same period.

A senior official of the World Bank in an interview here told this. To a question that Pakistan’s economy was presently facing many problems and whether WB’s talks on a package related to the restoration of Pakistan economy, he underlined the need for implementing the stringent financial and monetary policies for controlling inflation and cutting down the external and internal deficits.

WB representative said that the subsidy given to the energy sector would have to be withdrawn and the government’s borrowings from the Central Bank would have to be halted for financial stability. Quoting Pakistan finance minister, he said that Saudi Arabia has in principle expressed its agreement on deferring of payments on account of Pakistan oil imports, but its details were still being worked out. He said that nothing could be said at this stage about the upcoming visit of Prime Minster, Yusuf Raza Gilani and his meetings with the US leaders and World Bank officials.