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August 25, 2019
Business Latest Pakistan

IMF bailout package likely by May: Asad Umar

KARACHI: Federal Minister for Finance Asad Umar has said that Pakistan is likely to secure a bailout package from the International Monetary Fund (IMF) of between $6 billion and $12bn by the middle of May.

In an interview with the Financial Times, the minister said that he hoped an agreement would be reached with the Fund by “late April, first half of May”. The package would be of between $6bn and $12bn.

He said that they were approaching the landing zone. “The gap between our position and the IMF’s is significantly less than what it was a few months back.”

A sticking point in the negotiations between the two sides seems to be the exchange rate management of the rupee, which has lost 33 per cent of its value since 2017 when compared to that of the dollar.

“There is no conceptual difference between us and the IMF, the exchange rate needs to be reflective of the market,” said Mr Umar. “How you implement it and the sequence in which those steps have to be taken have been a part of the discussion and continue to be.”

According to analysts, the IMF has been suggesting measures such as a free-floating rupee, which would result in a further devaluation of the currency, and structural changes such as widening of the tax base.