Pakistan intends to approach US for bailout, confirms IMF

WION New Delhi, Delhi, India Oct 09, 2018, 06.53 PM(IST) Written By: Sidhant Sibal

File photo of Imran Khan. Photograph:( Reuters )

Story highlights

Approaching the IMF is considered as a U-turn by the new Imran Khan government

In first big confirmation on the bailout package to Islamabad, the International Monetary Fund(IMF) has told WION that it "understands" that Pakistan "intends to approach it".

Though Pakistan has not still approached IMF for the bailout package, the Pakistani finance minister Asad Umar has said that the country will be going forward with it.

Also Read: Pakistani rupee dives 8% as IMF bailout talks loom

The IMF spokesperson told WION,"We have not yet received a formal request for a program from Pakistan’s authorities. However, we understand that Pakistan intends to approach the IMF for support."

The IMF also assured that, "once we receive a formal request, the IMF will consider it as it does for other members of the IMF.”

A month ago when WION had asked IMF this question, the multilateral organisation had said "it has not received a request for financial support for Pakistan."

Approaching the IMF is considered as a U-turn by the new Imran Khan government since before the elections, Khan has been saying that he will go with a "begging bowl" to solve the economic issues his country is facing. Pakistan's economy is facing a massive economic crisis especially balance to payment issues. 

Pakistan's Finance Minister Asad Umar on Monday had said,"it was decided that we should start talks with the IMF for such a stabilisation, recovery programme on which basis we could overcome this financial crisis".

Many have linked the current debt crisis with China lead infrastructure project - China Pakistan Economic corridor(CPEC) which has caused many debt-linked issues in several countries including in South Asia in Sri Lanka.

The "Debt Trap Diplomacy" by China has been slammed by US. Earlier this year, US secretary of state Mike Pompeo had said that US will be watching what "IMF does" and "there is no rationale for IMF TAX dollars for those to go to bail out Chinese bondholders"

If IMF agrees to the bailout package, it will be second bailout package in 5 years and 13th in last three decades. Reports suggest Pakistan plans to approach for $12 billion bailout package from the IMF.