Pakistan to request $6 billion loan from IMF: Bloomberg

American magazine Bloomberg Thursday reported that Pakistan plans to seek a new loan of at least $6 billion from the International Monetary Fund to help the incoming government repay billions of dollars in debt due this year.

 The international news agency shared this development citing Pakistani officials.

According to it, Pakistan will seek to negotiate an Extended Fund Facility with the IMF, the official said, asking not to be identified as the discussions are private. Talks with the Washington-based lender are expected to start in March or April, the government official said.

The country will seek to negotiate an Extended Fund Facility with the IMF, the report said, adding that the talks with the global lender were expected to start in March or April, it added.

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“A new deal is key to the country’s credit profile, and we assume one will be achieved within a few months, but an extended negotiation or failure to secure it would increase external liquidity stress and raise the probability of default,” it said.

Pakistan averted default last summer because of a short-term International Monetary Fund bailout. The program expires next month and a new government will have to negotiate a long-term arrangement to keep the $350 billion economy stable, it mentioned.

Ahead of the bailout, the South Asian nation had to undertake a slew of measures demanded by the IMF, including revising its budget, a hike in its benchmark interest rate, and increases in electricity and natural gas prices.

The IMF staff continues a dialogue with authorities on needed longer-term reform efforts, a spokesperson for the fund said, adding that the fund is available if requested, to support the post-election government through a new arrangement to address Pakistan’s ongoing challenges.