Typical street scene in Santa Ana, El Salvador. (Photo: iStock)
IMF Survey: IMF Outlines $7.6 Billion Loan for Pakistan
November 15, 2008
- Proposed IMF loan to help Pakistan's balance of payments
- Financing expected from other multilateral institutions, regional development banks
- Protecting the poor a key element of program
The IMF said it has reached an initial agreement with Pakistan on the key elements of an economic program supported by an $7.6 billion loan to meet the country's serious balance of payments difficulties.
Textile depot in Karachi, Pakistan: aim is to restore investor confidence by addressing macroeconomic imbalances (photo: Aamir Qureshi/AFP/Getty Images)
GLOBAL FINANCIAL CRISIS
The 23-month Stand-By Arrangement is subject to the approval by the IMF Executive Board, which is expected to meet to discuss the program shortly, under the Fund's emergency financing mechanism. The IMF said the proposed loan amounted to some 500 percent of the country's quota in the Fund.
In a press statement, the IMF said Pakistan's program had two main objectives:
• To restore the confidence of domestic and external investors by addressing macroeconomic imbalances through a tightening of fiscal and monetary policies; and
• To protect the poor and preserve social stability through a well-targeted and adequately funded social safety net.
IMF Managing Director Dominique Strauss-Kahn said both objectives are an integral part of IMF support for Pakistan.
"This support is part of a broader package that includes financing from other multilateral institutions and regional development banks. I would like to call on the donor community to work together and act quickly to support Pakistan's program in order to mitigate the impact of the current economic difficulties on the poor and ensure an adequate level of spending on development programs," Strauss-Kahn added.
The IMF has moved quickly to help emerging market and developing countries affected by fallout from the financial crisis originating in advanced economies.
The IMF has more than $200 billion in lendable resources and says it is ready to process loan proposals quickly through its Emergency Financing Mechanism.
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