Pakistan seeks $6 billion IMF loan amidst debt challenges

WEB DESK: In a bid to address the looming debt repayment challenges, Pakistan is expected to pursue a new loan of at least $6 billion from the International Monetary Fund (IMF), according to a report by Bloomberg on Thursday.

Citing an official source from Pakistan, the country aims to engage in negotiations for an Extended Fund Facility (EFF) with the IMF, with talks anticipated to commence in March or April.

The South Asian nation successfully averted default last summer with the aid of a short-term IMF bailout.

However, as the existing programme nears expiration next month, the incoming government will face the crucial task of negotiating a long-term arrangement to ensure the stability of the $350-billion economy.

Prior to the potential bailout, Pakistan had implemented a series of measures mandated by the IMF, including a revision of its budget, an increase in its benchmark interest rate, and adjustments in electricity and natural gas prices.

As of now, neither the IMF nor Pakistan’s caretaker finance minister have responded to Reuters’ request for comments regarding the Bloomberg report.

Fitch, a leading ratings agency, highlighted on Monday that Pakistan’s vulnerable external position underscores the urgency for the next government to secure financing from both multilateral and bilateral partners.

The report emphasised that addressing this financial challenge will be among the top priorities for the incoming administration.

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