Pakistan rates to rise under any IMF deal-govt source
By Sahar Ahmed
KARACHI, Nov 10 (Reuters) - An expected IMF loan package for Pakistan is likely to include an interest rate increase of up to 150 basis points, a government official who declined to be identified said on Monday.
Pakistan is facing a balance-of-payments crisis and has been in talks with the International Monetary Fund (IMF) but it says it hopes to avoid having to go to the IMF and is trying to secure help from allies and other multilateral lenders.
The country needs $3.5 billion to $4.5 billion quickly to fill a financing gap and $10 billion to $15 billion to avoid a balance of payment crisis and make adjustments over the next two years.
The government official said the size of a possible IMF loan had not been officially agreed but it was likely to be a 2-year facility and would include steps to tighten monetary policy.
On interest rates, the official said: "It is my understanding that the discount rate will be increased by 100 to 150 basis points."
The discount rate was last raised in July by 100 basis points to 13 percent.
The official said the IMF would set a fiscal deficit target of 3.9 percent of gross domestic product compared with the government's full-year target of 4.7 percent.
The IMF would also set a tax revenue collection target of 1,360 billion rupees ($16 billion), compared with a government target of 1,251.46 billion rupees, for revenue this fiscal year. Continued...
Dubai Debt Fears
Banks outside the Gulf played down their exposure to Dubai debt, after fears the emirate could default and even derail world economic recovery prompted a sell-off in global markets. Full Article | Slideshow
India Investment Summit 2009
Top executives and bankers discuss their own plans and the broader opportunities and challenges for India. Full Coverage






India
US
UK







