International Monetary Fund (IMF) chief Christine Lagarde on Thursday said Pakistan has formally requested for financial assistance.
In a statement, Lagarde said she met with Finance Minister Asad Umar, State Bank Governor Tariq Bajwa and members of their economic team. “During the meeting, they requested financial assistance from the IMF to help address Pakistan’s economic challenges,” she said in the statement. “An IMF team will visit Islamabad in the coming weeks to initiate discussions for a possible IMF-supported economic programme,” she added.
The formal request follows an apparent 7 per cent devaluation by the central bank of Pakistani rupee on Tuesday.
Earlier in the day, Lagarde had said she would meet with Pakistani officials with expectations that Islamabad will request a bailout of its shaky economy. “I’m assuming that there might be a programme request on their part, but that has not been discussed and we will explore that in the afternoon,” she had told a press briefing.
Finance Minister Asad Umar had announced earlier this week that the government would seek talks with the IMF on a ‘stabilisation recovery programme’.
If a package is agreed, it would be Pakistan’s 13th IMF bailout since 1988. The Fund lent Islamabad $6.7 billion in 2013. At a news briefing on Tuesday, IMF Chief Economist Maurice Obstfeld had outlined the economic challenges that Pakistan was currently facing and also commented on its ability to finance itself.
Asked how would the IMF react to Pakistan’s request for an emergency bailout package, he said, “As with any member in good standing, they are certainly entitled to request financial support from the Fund. So, we will be listening very, very attentively when and if they come to us.” He had noted that Pakistan had “frequently … had programmes in the past several times…. and that is a very good sign going forward”.
Published in Daily Times, September 12th 2018.
