NUSA DUA, Indonesia (Reuters) – Pakistan has requested financial assistance from the International Monetary Fund to address its economic challenges, IMF Managing Director Christine Lagarde said on Thursday.
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 program,” Lagarde said. “We look forward to our continuing partnership.”
The formal request follows an apparent 7 percent 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, it would be Pakistan’s 13th IMF bailout since 1988. The Fund lent Islamabad $6.7 billion in 2013.
The latest bailout talks come amid increased scrutiny over China’s infrastructure loans to Pakistan. Beijing has pledged some $60 billion to finance rail, port and road projects as part of its “Belt and Road” program.
The United States has criticized China’s infrastructure lending, warning that it has saddled some developing countries with debts that they cannot afford to repay. U.S. Secretary of State Mike Pompeo has said there would be “no rationale” for an IMF bailout of Pakistan that pays off Chinese loans.
Asked about such concerns earlier on Thursday, Lagarde told a news conference 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 actually determine the debt sustainability of a country as financing programs are considered.
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