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The Pakistani Ministry of Finance said its leader, Asad Umar, would start negotiations later this week at an IMF meeting in Bali, Indonesia.
Photo:
Asad Zaidi / Bloomberg News
ISLAMABAD – The new Pakistani government said it had decided to start rescue talks with the International Monetary Fund as the country struggled with a balance of payments crisis.
Finance Minister Asad Umar will begin negotiations at the annual meeting of the multilateral lending agency in Bali, Indonesia later this week, the Pakistan Ministry of Finance said.
The new government, which took office in August, inherited foreign exchange reserves plummeting and an unprecedented balance of payments deficit.
Experts say the country needs about $ 12 billion to deal with future debt payments and cover imports.
Pakistan said in its statement that this shortfall should not come entirely from the IMF and that separate talks with its allies for an injection of funds would reduce the size of any IMF loan. But the government did not say how much it was asking the IMF.
"After taking into account the current situation and consulting leading economists, the government has decided to ask the IMF for a stabilization and economic recovery program," the Ministry of Finance said in a statement. "It should be noted that the government has engaged with friendly countries in the perspective of this decision and that commitment will continue."
Pakistan has not specified in which countries it is looking for money. Experts believe that China, Saudi Arabia and the United Arab Emirates are providing funding, which could take the form of a multi-billion dollar deposit to the central bank of Pakistan. China is already a major short-term lender, as well as a provider of long-term project financing.
Pakistan is the showcase for China's China and China's major infrastructure program, Belt and Road, but ongoing projects in Pakistan have contributed to the deterioration of the country's balance of payments and debt.
-Waqar Gilani contributed to this article.
Write to Saeed Shah at [email protected]
