IMF to approve additional loan for Pakistan

WASHINGTON: The IMF board of directors is scheduled to consider on Friday Pakistan’s request for additional loan and release of the delayed third tranche of $840 million to reduce pressure on the country’s forex reserves and the value of rupee.The third tranche was expected to be released by the end of June or early July, but it has been delayed by two months because of failure of the government to comply with the fund’s conditions.Pakistan had asked the IMF for a $4 billion standby loan for financing a budget gap of 4.9 per cent in 2009-10 to pre-empt a possible delay in external flows in the event of multilateral donors failing to release the pledged amount. The amount of loan being sought has now been revised to $3.1 billion.An official said the IMF board would decide the duration and mark-up of the additional loan. Pakistan and the IMF reached a 23-month standby loan agreement of $7.6 billion in November 2008 to meet the country’s balance of payments difficulties and help stabilise the economy.