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

Opinion

Editorial

Dark days
Updated 26 May, 2022

Dark days

The PTI, on its part, does not seem to have been prepared to face such a large deployment of state machinery.
26 May, 2022

No room for dissent

WHILE political turmoil roils the land, a number of incidents over the past few days have demonstrated that though...
26 May, 2022

Harassing passengers

REPORTS of the confiscation of personal items from passengers’ private luggage by customs officials at Karachi’s...
Back to bedlam
Updated 25 May, 2022

Back to bedlam

FEAR tactics have never worked in the past, and most likely will not this time either. The government’s ...
25 May, 2022

Balochistan blaze

THE forest fire on the Koh-i-Sulaiman range in Balochistan’s Shirani area is among a series of blazes to have...
25 May, 2022

Unequal citizens

INDIFFERENCE would have been bad enough, but the state’s attitude towards non-Muslims falls squarely in the...