Pakistan to seek its largest loan package from IMF

Published October 11, 2018
Finance Minister Asad Umar. ─ File
Finance Minister Asad Umar. ─ File

WASHINGTON: Pakis­tan is seeking its largest loan package of up to $8 billion from the International Monetary Fund (IMF) to bail itself out from a severe crisis that threatens to cripple its economy, diplomatic sources told Dawn.

The sources said that the IMF could place strict conditionalities, forcing Pakis­tan to seek additional loans for meeting those restrictions and this could expand the loan facility to $12bn.

Pakistan began exploring the possibility of yet another loan package with the IMF while the PML-N was still in power and the exploratory talks continued under the interim government as well.

The final decision, however, was announced on Monday night when Finance Minister Asad Umar confirmed that the government was going to the IMF to bail Pakistan out of its foreign currency crisis.

The announcement followed the highest single-day loss in a decade in the stock market, which plunged by over 1,300 points, losing almost Rs270bn of its capitalisation.

On Tuesday, the IMF said that it would listen to Pakistan’s request for financial support “very, very attentively”, as it did with any member with good standing.

Pakistan has received more than a dozen financial support packages from the IMF in the past. It completed the last three-year package of $6.4bn in August 2016, which was 216 per cent of Pakistan’s quota at the IMF.

The previous programme also aimed at “bringing down inflation and reducing the fiscal deficit to more sustainable levels”. It included measures to “help achieve higher and more inclusive growth, in particular through addressing bottlenecks in the energy sector”.

At a news briefing on Tuesday, IMF chief economist Maurice Obstfeld outlined the economic challenges that Pakistan was facing now and also commented on its ability to finance itself.

Asked how would the IMF react to Pakistan’s request for an emergency bailout package, he said: “As with any member in good standing, they are certainly entitled to request financial support from the Fund. So, we will be listening very, very attentively when and if they come to us.”

He noted that Pakistan has “frequently… had programmes in the past several times… and that is a very good sign going forward”.

Published in Dawn, October 11th, 2018

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Environment Day
05 Jun, 2023

Environment Day

OUR world is not reusable nor can it be made perishable. As the plastic tide spins out of control, World Environment...
Spending for votes
05 Jun, 2023

Spending for votes

THE cash-strapped government’s plans to boost its annual development spending by as much as 31pc in the next...
On schadenfreude
Updated 05 Jun, 2023

On schadenfreude

Was it a ‘crime’ that he spoke out against the abuses being suffered by PTI workers at the hands of the state?
Surveillance state
Updated 04 Jun, 2023

Surveillance state

IN the midst of the madness, finally some sanity. Questions critical to the right to privacy of citizens bombarded ...
Transport crisis
04 Jun, 2023

Transport crisis

LIKE many other public-sector projects, governments past and present have promised numerous times to ‘revive’ ...
The Buzdar mystery
04 Jun, 2023

The Buzdar mystery

THE departure of former Punjab Chief Minister Usman Buzdar from politics is not really surprising as the PTI is...