Pakistan to seek 4.5 billion dollars from IMF

KARACHI, February 17, 2009 (AFP) – Pakistan is to ask for an additional loan of 4.5 billion dollars from the International Monetary Fund to patch up an economy wilting under a widening trade deficit, an official said Tuesday. Among other tight demands, the IMF wants a reduction in Pakistan’s deficit and huge borrowing from the central State Bank.

The country approached the IMF last year for a rescue package as it grappled with a 30-year high inflation rate and fast-depleting reserves that held barely enough to cover nine weeks of import bills.

The request will be on top of a 7.6 billion dollar advance already agreed with the IMF, and comes as Pakistani officials meet creditors to review how the cash is being spent.

At the talks in Dubai, which are due to last until February 26, Pakistani and IMF officials will assess financial targets set for the country to qualify for the second installment of the loan, a finance ministry official said.

“During that meeting, Pakistan will ask for an additional loan of 4.5 billion dollars,” the official told AFP on condition of anonymity as he was not authorised by the government to release the information.

It was not immediately clear whether the IMF would grant the r