Pakistan needs more financial assistance from the International Monetary Fund and may seek another loan, the interim Finance Minister Shamshad Akhtar said a day after the nation won an initial approval from the multilateral lender for a tranche under an existing program.We need to continue with the IMF as our economy is still fragile and we will possibly seek another loan, said Akhtar, who is part of a caretaker government, at a news conference in Islamabad on Thursday.The comment, which comes a day after the South Asian nation reached a staff-level agreement with the IMF for a $700 million payout under a $3 billion program, highlights the magnitude of the economic and political crisis facing the country.
Pakistan has about $1 billion in dollar-denominated debt due next year after it holds elections scheduled for February.Indian intel on high alert as Pakistan announces general election dateWhile a nascent recovery is underway, the nation remains susceptible to significant external risks, the IMF said in a statement on Wednesday at the successful conclusion of talks with Pakistans caretaker government.
The term of the interim set up ends in February as the nation votes in national elections to elect a new administration.The caretaker government will try to talk to the IMF for the next program as the nation will need the lenders help to consolidate macro-economic stability, Akhtar said.
The countrys foreign reserves will jump in December after pledges made by global lenders materialize, she said.Pakistan postponed a plan to raise funds from the global bond market as it wont get the best price, the minister said and added the country is looking for other funding sources.Pakistan averted a default on its debt by securing the current nine-month loan program from the IMF in July and expects the completion of its first review along with inflows from other lenders to boost its dwindling reserves that fell $115 million to $7.4 billion in the week ended Nov.
10.
That is equivalent to less than two months of imports.The IMF agreement also gives a boost to Pakistans caretaker government under Prime Minister Anwaar-ul-Haq Kakar.
Hes trying to secure $6.3 billion in loans from the World Bank, Asian Development Bank and Islamic Development Bank, and about $10 billion in bilateral funding from creditor nations.Investors are showing optimism about Pakistans fiscal recovery on the back of the IMF loan that has spurred a more than 50% return on its dollar bonds this year.
The countrys benchmark equity gauge, the KSE-100 Index, is one of the best performers globally since the IMF deal in July.