PEER MUHAMMAD & FIDA HUSSAIN

ISLAMABAD ( 2008-11-22 04:35:40 ) :Pakistan has formally submitted Letter of Intent (LoI) to the International Monetary Fund (IMF) for $7.6 billion bailout package under 23-month stand-by arrangement, sources told Business Recorder on Friday.

The LoI was submitted to the office of country director IMF here. Advisor to the Prime Minister on Finance Shaukat Tarin and governor State Bank of Pakistan (SBP) have signed the document on behalf of the government. The LoI included two documents namely Memorandum of Economic and Financial Policies and Memorandum of Technical Understanding, sources added. Both the documents were handed over to IMF mission in Pakistan.

The sources said that the formal LoI submission has paved the way of obtaining loans package from IMF. Pakistan expects the first tranche on November 25. According to the IMF website the tentative date for the board meeting to approve the package regarding Pakistan is November 24.

Earlier, federal cabinet had approved economic stabilisation plan on November 19 and directed the Finance Ministry to finalise negotiations with IMF for reaching a formal agreement. The programme is spread over 23 months (7 Quarters), involving $7.6 billion at the interest rate of 3.51% to 4.51%. The standby facility will be approved by the IMF Board and a minimum of $3.2 billion will be credited to SBP account in New York immediately after the approval.



Copyright Business Recorder, 2008