Archive for the ‘loan’ Category

Pakistan secures IMF loan of at least 7.6 billion dollars

November 15, 2008

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.

State Bank of Pakistan Governor Shamshad Akhtar speaks during ...
State Bank of Pakistan Governor Shamshad Akhtar speaks during a news conference in Karachi, November 12, 2008. Pakistan hiked its key interest rate on Wednesday in a move to find favor with the International Monetary Fund as the government seeks billions of dollars in loans to fend off a balance of payments crisis.(Athar Hussain/Reuters)

“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.

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Pakistan hopes for Saudi aid amid financial crisis

November 3, 2008
ISLAMABAD, Pakistan (AP) — Pakistan is turning to Saudi Arabia for financial aid to ease an economic crisis that already has forced the militancy wracked South Asian nation to start talks with the International Monetary Fund.

Pakistani President Asif Ali Zardari arrives Tuesday in the oil-rich Arab nation to request a deferral on oil payments and other possible support, the Foreign Ministry said. Another potential topic: negotiating with the Taliban.

Nuclear-armed Pakistan needs billions in outside assistance to avoid defaulting on its international loans. The impoverished nation of 170 million people is hampered by high inflation, chronic power outages and a sinking currency, as well as a violent Islamist insurgency — all of which threaten to undermine the fledgling pro-U.S. government.

Analysts said Zardari’s visit could yield some temporary relief, but that he was unlikely to return with a package that would render moot politically unpopular IMF aid.

Pakistani President Asif Ali Zardari will visit Saudi Arabia ... 
Pakistani President Asif Ali Zardari, here seen in front of a portrait of his late wife, is visiting Saudi Arabia to seek a deferred payment on oil imports and garner support for a financial aid package.(AFP/File/Aamir Qureshi)

An IMF assistance package would likely come with painful requirements to cut government spending that could affect programs for the poor, making it a tough choice for the politicians.

Economist Muzammil Aslam predicted Zardari would ask for $3 billion in deferred oil payments from the Saudis, but warned that Pakistan should prepare for IMF assistance.

“If you miss the IMF now, you will need it again some months later, and that time you will have to accept more tough conditions,” he said.

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China to loan Pakistan $500M

April 18, 2008

ISLAMABAD, Pakistan (AP) — China will offer its close ally Pakistan a low-interest $500 million (315 million euro) loan to help ease its growing financial problems, Pakistan’s foreign minister said.

Shah Mehmood Qureshi made the announcement Thursday after a recent visit to China and after Pakistan hosted a protest-free, security-heavy leg of the Olympic torch relay amid Western criticism of its giant neighbor’s human rights record in Tibet.

Pakistan's nuclear-capable missile, Ghauri, is driven with its ...
Pakistan’s nuclear-capable missile, Ghauri, is driven with its mobile launcher during National Day military parade in Islamabad March 23, 2008.(Mian Khursheed/Reuters)

Qureshi, who accompanied President Pervez Musharraf on the April 10-15 trip, said that it had been “highly successful.”

“If we have any reliable friend, my experience says it is China,” Qureshi said at a news conference in the capital, Islamabad.

Qureshi is a loyalist of slain former Prime Minister Benazir Bhutto, whose party defeated Musharraf’s political supporters in February elections and now leads a new coalition government.

The government has inherited an ailing economy. It faces yawning budget and balance of payments deficits driven by rising world prices for commodities such as oil.

The World Bank last month urged the new administration to take urgent action or risk a crisis, even though the economy was still growing at an annual rate of more than 6 percent.

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