Pakistan won't seek new IMF program - official

Sun Sep 18, 2011 9:48am EDT
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By Sahar Ahmed

KARACHI (Reuters) - Pakistan will not seek a new IMF loan program or ask for an extension when its existing loan package ends on September 30, because it has no balance of payments crisis and has enough foreign exchange reserves, a finance ministry official told Reuters on Sunday.

Pakistan is due to meet with International Monetary Fund officials during the World Bank and IMF annual meeting in Washington from September 23-25.

"There is no immediate threat to the balance of payment and our foreign exchange reserves position is comfortable enough," the official said, speaking on condition of anonymity.

"There is no crisis at hand that will call for an immediate action. But we will stay in close contact with the IMF."

The official said Pakistan would ask the IMF to conduct an overview of its economy, known as an article IV consultation.

Pakistan has been struggling since 2008 to keep its economy afloat with an $11 billion IMF loan. Around $3 billion is left to be disbursed. The IMF has repeatedly urged Pakistan to speed up fiscal reforms.

The official said that despite no longer seeking IMF support, the government would "continue to implement the fiscal reforms required for macroeconomic stability in the medium term."

Pakistan's current account deficit in the first two months of 2011/12 fiscal year narrowed to $189 million, compared with a deficit of $1.016 billion in the same period last year, due to an increase in exports and a rise in remittances from Pakistanis working abroad.   Continued...