IMF rejects Pakistan’s US $ 6 Bn loan request

The International Monetary Fund (IMF) has rejected Pakistan’s request to reduce the requirement of securing $6 billion in additional loans, leaving the government with no choice but to salvage the agreement, according to The Express Tribune.

Minister of State for Finance, Dr Aisha Pasha, stated during a meeting of the National Assembly Standing Committee on Finance that Pakistan’s only option is to return to the IMF. The committee also discussed the possibility of invoking the contempt of Parliament law against Finance Minister Ishaq Dar for his absence during the meeting.

Pakistan’s economy is grappling with a severe inflationary crisis, reaching its highest rate since 1957. The country now finds itself with the highest inflation rate in Asia, surpassing even Sri Lanka. As of May 2023, the inflation rate stands at a staggering 38%, posing significant challenges for the government and the people of Pakistan.

Dr. Pasha revealed that Pakistan had asked the IMF to consider lowering the external funding requirement based on updated data on the current account deficit, but the request was declined. She further explained that $3 billion was to be arranged after reaching a staff-level agreement, but the IMF insisted on demonstrating the $6 billion.

Dr Pasha stressed that there was no alternative to going back to the IMF and there was no backup plan if negotiations failed.

Dr. Pasha said, “There is no option other than going back to the IMF, and I categorically say there is no Plan B.” (www.tribune.com.pk)