Pakistan forced to borrow more to repay IMF loan to save face

Pakistan will have to borrow money to repay its huge loan it has taken from the International Monetary Fund.

Federal Finance Minister Muhammad Ishaq Dar warned that facility of loan re-scheduling was not available in the IMF, and therefore non-repayment of loan would be deemed default.

Speaking at the National Assembly session, he said the IMF authorities had expressed regret that why it had sanctioned such a huge loan for Pakistan in the past as its repayment had become difficult.

According to the Daily Times, he mentioned that the Pakistan Government needed foreign inflows only for repayment of huge loans obtained by the previous governments.

He said the period of repayment of loans obtained by the previous governments had arrived, and the incumbent government was faced with a challenge of their repayment.

During the next fiscal year the government would be required to re-pay three billion dollars IMF loan obtained under 7.6 billion dollars Stand-By-Arrangement (SBA).

According to the report, for repaying such a huge amount while maintaining its foreign exchange reserves at a reasonable level, Pakistan would be required to engage with IMF and other key financial institutions to ensure repayment on time.