ISLAMABAD – International Monetary Fund (IMF) Managing Director ChristineLagarde on Thursday confirmed that Pakistan has formally requestedfinancial assistance from the fund to address its economic challenges.
Lagarde said in a statement that the request came during her meeting withFinance Minister Asad Umar State Bank Governor Tariq Bajwa on the sidelinesof the IMF and World Bank annual meetings in Bali.
“An IMF team will visit Islamabad in the coming weeks to initiatediscussions for a possible IMF-supported economic programme,” Lagarde said.”We look forward to our continuing partnership.”
link
Pakistan began exploring the possibility of yet another loan package withthe IMF while the PML-N was still in power and the exploratory talkscontinued under the interim government as well.
Prime Minister Imran Khan’s new administration took office in August vowingto weigh up whether to seek an IMF bailout as it sought other avenues offinancing.
He has sought loans from friendly countries, promised to recover fundsstolen by corrupt officials, and embarked on a series of populist austeritymeasures. But help has been in short supply and economists’ warnings havegrown increasingly urgent.
The final decision, however, was announced on Monday night when Asad Umarconfirmed that on a “stabilisation recovery programme”.
The announcement followed the highest single-day loss in a decade in thestock market, which plunged by over 1,300 points, losing almost Rs270bn ofits capitalisation.
On Tuesday, the IMF said that it would listen to Pakistan’s request forfinancial support “very, very attentively”, as it did with any member withgood standing.Pakistan seeks largest bailout yet
Read Top Stories
Pakistan is seeking its largest loan package of up to $8 billion from theIMF to bail itself out from a severe crisis that threatens to cripple itseconomy, diplomatic sources earlier told *Dawn*.
The sources said that the IMF could place strict conditionalities, forcingPakistan to seek additional loans for meeting those restrictions and thiscould expand the loan facility to $12bn.
Pakistan has received more than a dozen financial support packages from theIMF in the past. It completed the last three-year package of $6.4bn inAugust 2016, which was 216 per cent of Pakistan’s quota at the IMF.
The previous programme also aimed at “bringing down inflation and reducingthe fiscal deficit to more sustainable levels”. It included measures to“help achieve higher and more inclusive growth, in particular throughaddressing bottlenecks in the energy sector”.
At a news briefing on Tuesday, IMF chief economist Maurice Obstfeldoutlined the economic challenges that Pakistan was facing now and alsocommented on its ability to finance itself.
Asked how would the IMF react to Pakistan’s request for an emergencybailout package, he said: “As with any member in good standing, they arecertainly entitled to request financial support from the Fund. So, we willbe listening very, very attentively when and if they come to us.”
He noted that Pakistan has “frequently… had programmes in the past severaltimes… and that is a very good sign going forward”. – APP/AFP
