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Pakistan ‘to seek $6bn in new IMF programme’

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ISLAMABAD: Pakis­tan plans to seek a new loan of at least $6 billion from the International Monetary Fund (IMF) to help the incoming government repay billions in debt due this year, Bloomberg News reported on Thursday, citing a Pakistani official.

The country will seek to negotiate an Extended Fund Facility with the IMF, the report said, adding that the talks with the global lender were expe­cted to start in March or April.

Although a default was averted last summer thanks to a short-term IMF bailout, but the programme expires in April and a new government will have to negotiate a long-term arrangement to keep the economy stable.

The country had to undertake a slew of measures demanded by the IMF, including revising its budget, a hike in its benchmark interest rate, and increases in electricity and natural gas prices.

The IMF and the caretaker finance minister did not immediately respond to a Reuters’ request for com­ment on the Bloomberg report. The country’s vulnerable external position me­ans that securing fina­ncing from multilateral and bilateral partners will be one of the most urgent issues facing the next government, ratings agency Fitch said on Monday.

“A new deal is key to the country’s credit profile, and we assume one will be achieved within a few months, but an extended negotiation or failure to secure it would increase external liquidity stress and raise the probability of default,” it said.