Pakistan announced Saturday it will receive a loan of at least 7.6 billion dollars from the International Monetary Fund, the Fund’s first rescue in Asia since the global financial crisis began.
by Hasan Mansoor, AFP
Shaukat Tarin, top finance adviser to Pakistan’s premier, said the financial crisis had severely impacted the country’s foreign exchange reserves as he announced the package, aimed at staving off a balance of payments crisis.
“We have reached an agreement with the IMF with the help of our friends and other officials,” Tarin told a news conference, adding Pakistan would receive four billion dollars this year as part of the 23-month IMF deal.
Pakistan needs up to 4.5 billion dollars (3.5 billion euros) to deal with a balance of payments crisis that has raised the prospect of the violence-hit nation defaulting on its foreign debts.
“The impact of the financial crisis in the world and the difficulties we faced at home impacted gravely, particularly to our foreign exchange reserves which were 16.4 billion dollars in October 2007 and now are less than 7 billion dollars,” Tarin said.
He added that the interest rate on the IMF programme will be 3.51 to 4.51 percent and Pakistan will repay the loan over five years starting from 2011.