Pakistan and IMF discuss new loan programme

Pakistan has initiated discussions with the IMF over a new multi-billion dollar loan agreement to support its economic reform programme, its new finance minister told AFP on Monday.

The South Asian nation is nearing the end of a nine-month, US$3 billion (RM14 billion) loan programme with the International Monetary Fund (IMF) designed to tackle a balance-of-payments crisis which brought it to the brink of default last summer.

With the final US$1.1 billion tranche of that deal likely to be approved later this month, Pakistan has begun negotiations for a new multi-year IMF loan programme worth “billions” of dollars, Finance Minister Muhammad Aurangzeb said during an interview in Washington.

“The market confidence, the market sentiment is in much, much better shape this fiscal year,” said the former banker who took up his post last month.

“It’s really for that purpose that, during the course of this week, we have initiated the discussion with the IMF to get into a larger and an extended programme.”

An IMF spokesman said the fund is “currently focused on the completion of the current stand-by agreement programme”, referring to the ongoing nine-month programme scheduled for completion shortly.

“The new government has expressed interest in a new programme, and IMF staff stands ready to engage in initial discussions on a successor programme.”

During his visit to Washington, the Pakistani minister will also attend the spring meetings organised by the IMF and World Bank, which kick off in earnest yesterday, with two clear objectives – to help countries combat climate change and to assist the world’s most indebted nations. – AFP