The International Monetary Fund (IMF) deemed Pakistan’s decision to obtain a loan from a private bank at a hefty interest rate of 11% unnecessary, saying that the IMF did not advise Pakistan to take such commercial loans.
The Pakistani government had requested a loan from Standard Chartered Bank to fill the external financing gap, arguing that acquiring this loan was essential for the approval of the IMF program.
The government reached an agreement to secure a $600 million loan from Standard Chartered Bank in London at an interest rate of 11%, which is the highest interest rate among the loans acquired so far.
The Ministry of Finance claimed that there was initial hesitation in obtaining this loan, but after failing to secure funds from other sources, it had to swallow this bitter pill.
According to a senior government official, no bank is willing to provide a loan at a lower interest rate, so they were forced to accept this high-interest loan.
However, just yesterday, the IMF’s Executive Board approved a $7 billion loan program for Pakistan, and today an IMF spokesperson stated in their released statement that Pakistan’s acquisition of commercial financing at an interest rate of 11% is not known to them.
The IMF spokesperson stated that the IMF did not advise Pakistan to take such a commercial loan, and that such financing is not necessary for assurances regarding the IMF program.
