IMF to launch financial assistance talks with Pakistan: Lagarde

Nusa Dua, Indonesia

PAKISTAN has requested financial aid from the International Monetary Fund (IMF) to address its economic challenges, IMF managing director Christine Lagarde said on Thursday.

Ms Lagarde said in a statement that the request came during her meeting with Pakistani Finance Minister Asad Umar, and central bank governor Tarik Bajwa on the sidelines of the IMF and World Bank annual meetings in Bali.

"An IMF team will visit Islamabad in the coming weeks to initiate discussions for a possible IMF-supported economic programme," Ms Lagarde said. "We look forward to our continuing partnership." The formal request follows an apparent 7 per cent central bank devaluation of Pakistan's rupee currency on Tuesday, after Pakistani President Imran Khan announced it would seek financial assistance to ease a mounting balance of payments crisis. If a package is agreed to, it would be Pakistan's 13th IMF bailout since 1988. The Fund lent Islamabad US$6.7 billion in 2013.

The latest bailout talks come amid increased scrutiny over China's infrastructure loans to Pakistan. Beijing has pledged some US$60 billion to finance rail, port and road projects as part of its "Belt and Road" programme. The US has criticised China's infrastructure lending, warning that it has saddled some developing countries with debts that they cannot repay.

US Secretary of State Mike Pompeo has said there would be "no rationale" for an IMF bailout for Pakistan that pays off Chinese loans.

Asked about such concerns earlier on Thursday, Ms Lagarde said that any IMF loan, to Pakistan or other countries, requires "a complete understanding and absolute transparency about the nature, size, and terms of the debt that is bearing on a particular country."

She said this requires an assessment of both sovereign and state enterprise debt to determine the debt sustainability of a country. REUTERS