Pakistan To Receive At Least $7.6 Billion As IMF Rescue Loan

November 15, 2008 7:16 p.m. EST

Islamabad, Pakistan (AHN) - Pakistan is expected to receive at least $7.6 billion from the International Monetary Fund (IMF) to stabilize its economy amid global financial turmoil.

Shaukat Tarin, adviser to the prime minister, told reporters Saturday that the country will get the loan to help avoid defaulting on its international debt as credit crisis widens on declining market value of the equities.

The announcement by the top official in Pakistan ahead of G20 summit in Washington, D.C., where the presidents and prime ministers of rich and emerging economies are going to develop a common approach to combating the global economic crisis.

Recently, IMF Managing Director Dominique Strauss-Kahn urged leaders of the industrialized and developing economies to take measure to help counter the global economic slowdown.

He mentioned in his letter to the leaders on November 6 that emerging markets were now under great stress as the "capital flows that have sustained growth dry up across the board. The international community must take action."

Tarin reportedly said that Pakistan would initially get $4 billion by the end of this year, which will be a part of 23-month deal with IMF, and it would start repaying the loan in 2011, according to AFP news agency.

The South Asian country has experienced a growth of up to 8 percent in the last few years, mainly led by consumer financing sector.

Under the IMF deal, the country will have to reduce the size of the government, slash its expenses on development and cutback on a few subsidies crucial for certain sectors.

Pakistan requires up to $4.5 billion to tackle with its debt payment crisis as its currency has lost value and its foreign-exchange reserves have contracted by as much as 75 percent in the last 12 months to $3.5 billion last week.