Today: Sunday, 14 April 2024 year

Pakistan formally seeks ‘financial assistance’ from IMF

Pakistan formally seeks ‘financial assistance’ from IMF

Pakistan sent an official request to the International Monetary Fund, FT reported. PM Imran Khan’s cabinet urgently needs a financial assistance, confirmed the IMF on Thursday.

A series of talks could lead to a bailout of Pakistan, said Christine Lagarde. Asad Umar, Pakistan’s finance minister had met with the IMF chief on the sidelines of the IMF and World Bank annual meetings in Bali, Indonesia.

“During the meeting, they requested financial assistance from the IMF to help address Pakistan’s economic challenges,” Ms Lagarde said and promised to visit  Islamabad “in the coming weeks” to begin talks about the financial assistance.

For Pakistani business people, the agreement with IMF sounds not so good because of China’s commitments to invest $62bn through the China-Pakistan Economic Corridor plan. “In our ruling circles, CPEC is seen as the lifeline of Pakistan’s future prosperity,” said local bank head. The readiness of the Pakistani government to request financial assistance from IMF brings a lot of trouble to the economy.

Ms Lagarde’s statement came three days after financial minister Umar confirmed plans to approach the IMF. The proposed bailout would be the 13th in Pakistan’s history, and people briefed on the government’s plans said it would request loans of between $6bn and $7bn — roughly the same total as provided during the last round of IMF assistance in 2013.

On Thursday, Pakistani authorities had already allowed the rupee to fall 7 per cent in a day, in what analysts saw as a move to anticipate a probable key demand from the IMF.