CNews KARACHI: The International Monetary Fund (IMF) will extend 7.6 billion dollars to Pakistan under a 23-month loan programme, said Adviser on Finance Shaukat Tareen on Saturday.Addressing a press conference here at State Bank of Pakistan, the Adviser said the IMF will provide this loan under stand by credit limit at interest rate ranging between 3.51 and 4.51 per cent and its repayment will be made in five years beginning from 2011.
Governor SBP, Dr. Shamshad Akhtar was also present on the occasion.
Shaukat Tareen said IMF has not attached any new condition to the loan facility.
The IMF will release 4 billion dollars as the first tranche of the loan this year while the rest will be provided in the coming year.
However, he said the IMF will make its final decision regarding the loan programme after its board meeting.
The Finance Adviser expressed his inability to announce the exact date of receiving the loan but said it will happen during the current month.
He said the prime objective of receiving the IMF loan facility is to improve the position of SBP’s foreign exchange reserves.
The loan will not be utilized in the stock market and for this purpose a fund is being set up from the country’s own resources, he clarified.
He ruled out the reduction of SBP’s discount rate until the easing of the current high inflation rate.
The foreign rating agencies downgraded Pakistan’s credit rating due to the ongoing economic crisis in the country, he said, adding the government is doing its utmost to tackle this challenge.
The Adviser said the balance of payments has been badly affected due to the depleting foreign exchange reserves of the country which shrank by half in one year.
The rupee value declined by 21.8 per cent as oil and food prices galloped. The rate of inflation kept on rising, creating hardship for the people specially the poor.
He said the Government has decided to stop borrowing from SBP and added that the fiscal deficit will be brought down to 4.1 per cent from 7.4 per cent.
Shaukat Tareen said the Government supports SBP stance of tightening the monetary policy.
