World - Cash strapped Pak may ink agreement with IMF

Financially-wrecked Pakistan is expected to sign an agreement with the IMF next week to avail a bailout package of $9 billion.

The agreement, aimed at shoring up dwindling foreign exchange reserves and addressing concerns over a balance of payments crisis, is likely to be signed on November 10-12, Dawn News channel quoted an unnamed official as saying. There was no official word on the move from the Pakistan government or the IMF, which recently concluded negotiations in UAE on a possible aid package for the country. Pakistan is expected to get $ 9 bilion in aid over two years once the agreement with the IMF is signed, the Dawn reported.

The country will immediately receive 1.5 billion dollars while the remaining amount will be released quarterly on the basis of its economic performance.

The IMF is expected to ask Pakistan to cut its fiscal deficit, improve tax collection and reduce spending. Some reports have also suggested that the IMF might ask the country to slash its defence budget by as much as 30 per cent over the next five years to be eligible for aid. President Asif Ali Zardari had, earlier, said that Pakistan will not accept any tough conditions from the IMF but experts believe the country is running out of options to address its economic problems.

Islamabad's traditional allies, China and Saudi Arabia are yet to respond to its requests for immediate economic assistance and oil supplies against deferred payments. —PTI