KARACHI: The finance adviser to the Pakistani prime minister said on Saturday a $6 billion bailout loan secured from the International Monetary Fund this month carried an interest rate of 3.2 percent.
Under the IMF’s terms, the government is expected to let the rupee fall to help correct an unsustainable current account deficit and cut its debt while trying to expand the tax base in a country where only one percent of people file returns.
“The program we have obtained has a magnitude of $6 billion and is spread over three years,” finance adviser Abdul Hafeez Shaik said at a press conference. “The good thing about it is that the rate of borrowing is much lower than other programs. The interest rate is 3.2 percent.”
The country’s last IMF bailout, signed in 2014, carried a 2 percent interest rate and was repayable after 30 years.
Pakistan’s foreign currency reserves currently stand at around $8 billion, not enough to cover three months of imports, making the country desperate for the IMF board to give its blessing for the release of the first tranche of the loan.
Signing the IMF program would “send a good signal to the international community that Pakistan wishes to take its economy forward in a disciplined manner and people will find incentive to form alliances and partnerships with us,” Shaikh said, adding that the country would also now be able to get $2-3 billion in loans from the World Bank and the Asian Development Bank.
Shaikh has to present a 2019/20 budget next month, having been told by the IMF that the primary budget deficit — excluding interest payments — should be cut to 0.6 percent of GDP, implying a $5 billion reduction from the current projection for a deficit of 2.2 percent.
“In the coming days important decisions would be taken for the improvement of the country’s economy,” he said. “The difficult time is about to end and the coming year would be a year of stability.”
Inflation at its highest in more than five years has shocked many Pakistanis who voted for Prime Minister Imran Khan and his promise to eradicate poverty, create jobs and build an Islamic welfare state. This month, the central bank has hiked its key interest rate by 150 basis points to 12.25 percent even though the economy is slowing and millions of people are struggling to find work.
“The government will take steps to protect vulnerable segments,” the finance adviser said.
Finance adviser says Pakistan’s $6 bln IMF loan carries 3.2% interest rate
Finance adviser says Pakistan’s $6 bln IMF loan carries 3.2% interest rate
- Last IMF bailout signed in 2014 carried a 2 percent interest rate, was repayable after 30 years
- Under IMF’s terms, government is expected to let rupee fall to correct current account deficit
Pakistan’s Sindh orders inquiry after clashes at Imran Khan party rally in Karachi
- Khan’s PTI party accuses police of shelling to disperse its protesters, placing hurdles to hinder rally in Karachi
- Sindh Local Government Minister Nasir Hussain Shah vows all those found guilty in the inquiry will be punished
ISLAMABAD: The government in Pakistan’s southern Sindh province has ordered an inquiry into clashes that took place between police and supporters of former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party in Karachi on Sunday, as it held a rally to demand his release from prison.
The provincial government had granted PTI permission to hold a public gathering at Karachi’s Bagh-i-Jinnah Park and had also welcomed Sohail Afridi, the chief minister of Khyber Pakhtunkhwa province where Khan’s party is in power, when he arrived in the city last week. However, the PTI cited a delay in receiving a permit and announced a last-minute change to a gate of Mazar-i-Quaid, the mausoleum of the nation’s founder.
Despite the change, PTI supporters congregated at the originally advertised venue. PTI officials claimed the party faced obstacles in reaching the venue and that its supporters were met with police intervention. Footage of police officers arresting Khan supporters in Karachi were shared widely on social media platforms.
“A complete inquiry is being held and whoever is found guilty in this, he will be punished,” Sindh Local Government Minister Nasir Hussain Shah said while speaking to a local news channel on Sunday.
Shah said the PTI had sought permission to hold its rally at Bagh-i-Jinnah in Karachi from the Sindh government, even though the venue’s administration falls under the federal government’s jurisdiction.
He said problems arose when the no objection certificate to hold the rally was delayed for a few hours and the party announced it would hold the rally “on the road.”
The rally took place amid rising tensions between the PTI and Pakistan’s military and government. Khan, who remains in jail on a slew of charges he says are politically motivated since August 2023, blames the military and the government for colluding to keep him away from power by rigging the 2024 general election and implicating him in false cases. Both deny his allegations.
Since Khan was ousted in a parliamentary vote in April 2022, the PTI has complained of a widespread state crackdown, while Khan and his senior party colleagues have been embroiled in dozens of legal cases.
