Pak to get $ 7.6 bn from IMF
IMF has "in principle" agreed to extend a credit of $7.6 bn to Pak to stabilise its ailing economy and help it avoid defaulting on foreign debt repayments, the government said on Saturday.world Updated: Nov 15, 2008 19:16 IST
The International Monetary Fund (IMF) has "in principle" agreed to extend a credit of 7.6 billion dollars to Pakistan to stabilise its ailing economy and help it avoid defaulting on foreign debt repayments, the government said on Saturday.
"Pakistan would get 4.6 billion dollars this month while the remaining 3 billion dollars would be disbursed next year," Pakistan's Advisor on Finance Shaukat Tarin told reporters.
Tarin said the credit facility will be for two years under a standby arrangement.
"The facility has been obtained to strengthen the country's foreign exchange reservoirs and it will not be utilised to bailout the stock market".
He said the repayment of the credit will start in 2011 and will be completed in five years time. The rate of interest would be between 3.51 to 4.51 per cent.
Tarin said the IMF loans have no conditionalities for micro-management of the economy and the conditions agreed with the Fund are already there in the current year's budget.
He said the rating companies have reduced the economic rating of Pakistan as it is passing through economic challenges.
The government supports the steps taken by the State Bank to tighten the monetary policy of the country, he added.
The Advisor said the rupee has been depreciated by 21.8 per cent and the foreign exchange reserves have been reduced to half during the last one year.
The increase in the inflation rate has affected the poor segments of the society, he said adding, and increase in the discount rate will help to check the inflation. He said the government has decided not to borrow from the State Bank.