Pakistan intends to request a new loan of at least $6 billion from the International Monetary Fund (IMF) to assist the incoming government in repaying billions in debt due this year, as reported by Bloomberg News on Thursday, citing a Pakistani official.
The country aims to negotiate an Extended Fund Facility with the IMF, with talks expected to commence in March or April, the report added.
Although a default was avoided last summer with a short-term IMF bailout, the program is set to expire in March, requiring a new government to negotiate a long-term arrangement to maintain economic stability.
To comply with IMF demands, Pakistan implemented various measures, including budget revisions, a benchmark interest rate hike, and increases in electricity and natural gas prices.
Neither the IMF nor the caretaker finance minister responded immediately to Reuters’ request for comment on the Bloomberg report.
Fitch, a ratings agency, emphasized that Pakistan’s vulnerable external position makes securing financing from multilateral and bilateral partners a top priority for the incoming government.
Fitch stated on Monday, “A new deal is key to the country’s credit profile, and we assume one will be achieved within a few months, but an extended negotiation or failure to secure it would increase external liquidity stress and raise the probability of default.”
Thank you for sharing this valuable information. The report on Pakistan seeking a $6 billion lifeline from the IMF for debt repayment provides crucial insights into the country’s economic situation. It will be interesting to see how the negotiations progress in March or April and the potential impact on Pakistan’s credit profile. Grateful for keeping us informed on these developments.
This blog sheds light on a significant economic development. Eagerly awaiting further updates on this crucial financial matter.
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