IMF agrees to lend $7.4 bn to Pakistan

November 15th, 2008 - 8:37 pm ICT by IANS  

Islamabad, Nov 15 (DPA) Pakistan’s top economic adviser Saturday said the International Monetary Fund (IMF) had agreed to provide a loan of at least $7.4 billion to stave off an economic meltdown.Shaukat Tarin told journalists in the port city of Karachi that the 23-month loan facility was exclusively for strengthening the country’s foreign exchange reserves and to avert a balance of payment crisis.

Pakistan has immediate need of up to $5 billion to avoid default on its foreign debts.

“A letter of intent will be sent next week and then the IMF board will take the final decision,” Tarin said.

The repayment of the loan will start in 2011 and will be completed in 2016, with an interest rate between 3.5 to 4.5 percent, according to the adviser.

Pakistan’s seven-month-old government is grappling with high inflation rate and fast-depleting reserves that are barely enough to cover 90 days of imports.

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