October 24, 2008 / 6:06 PM / 9 years ago

IMF says Pakistan has not requested financing

WASHINGTON (Reuters) - Pakistan has not asked the International Monetary Fund for financing but current talks with the authorities will enable the fund to respond swiftly should they do so, an IMF spokesman said on Friday.

The IMF nameplate is displayed on a wall at the headquarters during the World Bank/International Monetary Fund Spring Meetings in Washington in this April 11, 2008 file photo. REUTERS/Jonathan Ernst

IMF spokesman Masood Ahmed, who from Nov. 1 will head the IMF’s Middle East Department, said talks between the fund and Pakistani officials, now being held in Dubai, involve technical issues.

“These discussions should enable the Fund to respond quickly if and when the Pakistani authorities make a formal request for financial support from the IMF,” Ahmed said.

His comments appeared to clarify an Oct. 22 IMF statement in which the fund said it was about to start discussions with Pakistani authorities and that an amount under a stand-by IMF program still had to determined.

Questions over whether Pakistan was seeking an IMF-supported funding program arose on Thursday when a senior Pakistani official said the country had not formally asked for funding.

Shaukat Tarin, advisor to Pakistan’s prime minister, told a news conference in Islamabad the country still hoped to secure funds from other lenders, including friendly governments, to fill a financing gap of between $3.5 billion and $4.5 billion.

The seven-month-old civilian government now running Pakistan after more than eight years of rule under former army chief Pervez Musharraf has been reluctant to go to the IMF.

But the severity of its balance of payments crisis appeared to leave it little option. The country’s foreign currency reserves have been falling at a rate of nearly $1 billion a month, and the central bank has barely enough to cover six weeks of imports.

Potential donors, including China, are expected to gather in Abu Dhabi in November, under the banner “Friends of Pakistan”.

Tarin, who has said that going to the IMF would only be a backup, has made it clear that any IMF-backed program would have to be on Pakistan’s terms.

White House spokeswoman Dana Perino said the United States had long been concerned about Pakistan’s economy and how it could affect political stability in the country.

“We know that they have been talking to the IMF and we’re working with them, too,” she told reporters. “We recognize that a stronger economic situation in Pakistan will help all of us be safer.”

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