Pakistan has not yet requested IMF funding: official

Pakistan has not yet made a formal request to the International Monetary Fund for cash assistance to help it overcome the current economic crisis, a top finance ministry official said Thursday.

Pakistan immediately needs up to 4.5 billion dollars to deal with a balance of payments crisis, which had raised the prospect of the violence-hit country defaulting on its foreign debts.
The IMF is one of the last options Pakistan looks at before shoring up funds from multilateral donor agencies and friendly countries, but has initiated discussions with the Fund because it has a few weeks to arrange the money.

"We have not formally requested the board of IMF for a facility as of now," financial advisor Shaukat Tarin told a press conference.

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Pakistan and Belarus seek IMF aid

Pakistan sought help from the International Monetary Fund on Wednesday to avoid a possible economic meltdown brought on by high fuel prices, dwindling foreign investment and soaring violence by militants.

And Belarus has requested IMF credit to uphold stability and economic growth rates, the Belarussian central bank said Wednesday.

Pakistani officials had previously said that turning to the IMF to avoid defaulting on billions of dollars of sovereign debt due in the coming months would be a last resort.

IMF aid often comes with conditions like cutting public spending that can affect programs for the poor, making acceptance of the aid a politically tough choice for governments.

The IMF said Pakistan had requested help "to meet the balance of payments difficulties the country is experiencing." The IMF said that the amount of money sought by Pakistan had yet to be determined and that talks on the loan package would begin in a few days.

Economists in Pakistan say that as much as $5 billion is needed to avoid defaulting on sovereign debt due for repayment next year but that $8 billion more may be needed.
The country has also asked for loans from wealthy nations and multilateral agencies like the World Bank. Analysts say Pakistan will probably get that help also because of its front-line status in the battle against terrorism.

Any default would further undermine local and international confidence in the Pakistani government and the economy at a time of intense fighting against Al Qaeda and Taliban militants near the Afghan border.