Pakistan Hopes for IMF Bailout Package Rise as U.S., Japan Lift Curbs

November 16, 1998 - 0:0
KARACHI The U.S. and Japanese move to lift economic sanctions has brightened prospects for Pakistan getting a bailout loan package from the International Monetary Fund (IMF), experts and officials say. Talks are under way here since Wednesday between an IMF mission and Pakistan, which desperately needs five billion dollars to wade through a serious balance of payments crisis. Latest official figures show the country's forex reserves have further dipped to $423.5 million this week.

The reserves were at $1.43 billion before the nuclear tests by the country in May. Pakistani Finance Minister Ishaq Dar said Thursday the talks with IMF were progressing satisfactorily and expressed the hope that an agreement would be finalized within a week. The seven-member IMF mission led by Sena Eken will take the agreement to the fund's board for final approval, expected in December. The proposals envisage the revival of $1.56 billion package that was suspended by the IMF after the United States slapped sanctions on India and Pakistan following their nuclear tests.

Other relief being sought includes loans by the World Bank and the Asian Development Bank (ADB) and rescheduling payments worth billions of dollars due from Pakistan on its $32 billion external debt. Cash-strapped Pakistan this week paid $44 million to the World Bank and ADB to avert a default on its external debts, Dar said. Pakistan repaid $25 million to the World Bank and $19 million to the ADB from the country's export proceeds and remittances on Thursday, he told a local daily The Nation. (AFP)