Government trying to get $ 3.5b loan from IMF

In an attempt to steer Pakistan out of the capital crunch, the government is striving hard to convince International Monetary Fund (IMF) for a fresh loan programme to tune of $3.5 billion.
According to sources privy to a 22 member Pakistani delegation, currently, engaged in two rounds of talks with IMF, they were primarily looking for an endorsement of a medium-term macroeconomic framework. Besides a clean chit under Article IV consultation, Pakistan is also seeking an agreement on macroeconomic and fiscal framework, which is a pre-requisite to negotiations for a fresh loan programme, the sources added.
However, the government delegation was still insistent upon its earlier stance that they were not looking for a fresh loan programme. “Federal Minister for Finance Dr.Adful Hafeez Shaikh and myself have repeatedly said that neither a Fund programme has been asked for nor is there a need for now,” said Secretary Finance Waqar Masood answering questions in this regard. Secretary Masood was leading the delegation until the arrival of Finance Minister Monday night or Tuesday.
Meanwhile the Finance Minister departed Islamabad to lead his team already in Dubai. According to the sources, the Finance Minister considers Pakistan being in any one of the IMF programme was a good omen for its economy. “That is why, he would personally convince IMF for an extended loan programme for Pakistan in order to help tackle swelling fiscal deficit,” the sources added.
According to Finance Ministry officials, Pakistan will start repayments of $500 million Budgetary Support Loans in January next year and $7.236 billion IMF Stand-By-Arrangement loan from February 2012.
Pakistan had enter into a $11.3 billion programme in 2008 with IMF and got disbursements of about $7.6 billion, but failed to get the remaining $3.7 billion due to slippages in performance criteria, leading to suspension of the programme in May 2010 and was ended unsuccessfully on September 30,2011.