Pakistan and Bangladesh have been urged by the International Air Transport Association (IATA) to promptly release airline profits that are being withheld in violation of international agreements.

“Airlines are unable to repatriate over $720 million ($399 million in Pakistan and $323 million in Bangladesh) of revenues earned in these markets, resulting in a severe situation,” an IATA statement stated.

“Money-denominated expenses like lease agreements, spare parts, overflight fees, and fuel must be paid for in a timely manner by repatriating revenues to their home countries.”

Delaying repatriation raises exchange rate risks for airlines and violates bilateral agreements’ international commitments. In order for airlines to effectively continue to offer the aviation connectivity that both of these countries depend on, Pakistan and Bangladesh must immediately release the more than $720 million that they are blocking, according to Philip Goh, Regional Vice President for Asia-Pacific at IATA.

Pakistan needs to make the difficult repatriation procedure less complicated. According to the statement, this presently includes the need to present audit certifications and tax exemption certificates, both of which create needless delays.

Approximately 425,000 jobs and $2.8 billion in economic activity were supported by Pakistan’s aviation industry prior to COVID-19. Passenger numbers are predicted to increase by more than 2.5 times by 2040 after returning to pre-COVID levels in 2023, according to the statement.

The cash represents the second and final tranche of a $3 billion standby agreement with the IMF, which was acquired last summer to avoid a sovereign default and expires this month.

The South Asian nation is looking for a fresh, longer-term IMF loan. Pakistan’s Finance Minister, Muhammad Aurangzeb, has stated that Islamabad expects to get a staff-level agreement on the new programme by early July.

Islamabad says it wants a loan for at least three years to help with macroeconomic stability and to carry out long-overdue and painful structural reforms, but Aurangzeb has declined to specify what type of programme the country wants.

Read more: Pakistan plans to agree on the outline of a new IMF loan in May. Fin-Min Aurangzeb

Pakistan has yet to make a formal request, but the Fund and the government are already in discussions.

If secured, it will be Pakistan’s 24th IMF bailout.

The $350 billion economy is experiencing a chronic balance of payment crisis, with nearly $24 billion in debt and interest to repay over the next fiscal year – three times the amount of foreign currency reserves held by the central bank.

Pakistan’s finance ministry expects the economy to grow by 2.6% in the current fiscal year, which ends in June, while average inflation is expected to be 24%, down from 29.2% in fiscal year 2023/2024. Last May, inflation soared to a record high of 38%.

Investors celebrated as the PSX finally crossed the historic 71,500 point threshold, signalling a critical turning point in the state of the economy in the country.

The KSE-100 index jumped more than 740 points, soaring to a record high of 71,650 points, demonstrating the tenacity and optimism that pervaded the Pakistani financial market.

This outstanding accomplishment indicates strong growth possibilities for the foreseeable future and demonstrates investors’ faith in the nation’s economic prospects.

The Pakistan Stock Exchange (PSX)’s KSE-100 index saw a minor decline of 60.92 points on Friday, or 0.09 percent, and ended the day at 70,483.66 points.

In the foreign exchange market, the US dollar lost value in relation to the Pakistani rupee at the same time.

Currency dealers claim that on the first day of the workweek, the value of the US dollar dropped by 11 paisas to Rs278.20 in the interbank market, significantly strengthening the rupee.