International Monetary Fund (IMF) has approved a stand-by credit of about $ 596 million until end-September 2001 to Pakistan to support its current economic programme. The decision by IMF's executive board on Thursday will enable Pakistan to draw about $ 192 million immediately, marking the resumption of IMF assistance after it was suspended almost two years ago when the deposed Nawaz Sharif's government failed to reach its economic targets.
But the IMF has laid certain conditions. Pakistan has to follow through its promise to raise more taxes, clean up a corrupt tax collection system, reduce its budget deficit to 5.2 from 6.4 per cent and free float the Pakistani rupee.
Horst Kohler, managing director of the IMF, said that a meeting of the Paris Club is expected in January 2001 to consider a request by Pakistan for a rescheduling of both its accumulated arrears and its debt service payments to Paris club creditors falling due during the programme period on pre-cutoff debt.
The Pakistan authorities, he said, intend to seek comparable treatment from all other official bilateral and private creditors. Kohler said that the Pakistan authorities have put in place an economic adjustment and reform programme, for which financial support under a stand-by agreement has been approved by the board.
Bureau Report