IMF exposes Pakistan’s loan acquisition at 11% interest rate

The International Monetary Fund (IMF) has termed Pakistan’s acquisition of a loan from a private bank at an exorbitant interest rate of 11% as unnecessary, stating that the IMF did not direct Pakistan to take such a commercial loan.

The Pakistani government sought this loan from Standard Chartered Bank to fill an external financing gap, claiming it was necessary for the approval of the IMF program.

The government has signed an agreement with Standard Chartered Bank in London to borrow $600 million at an interest rate of 11%, the highest interest rate for any loan acquired so far.

The Ministry of Finance claimed that initially, it was reluctant to acquire this loan, but after failing to secure funds from other sources, it had no choice but to accept this bitter deal.

According to a senior government official, no bank was willing to provide the loan at a lower interest rate, so they had to borrow at a high rate out of necessity.

However, yesterday, the IMF Executive Board approved a $7 billion loan program for Pakistan, and today the IMF spokesperson issued a statement saying they were not aware of Pakistan’s acquisition of commercial financing at an 11% interest rate.

The IMF spokesperson further clarified that the IMF did not instruct Pakistan to acquire such a commercial loan, and such financing is not necessary to meet the assurances of the IMF program.