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Friday, April 19, 2024  
09 Shawwal 1445  

US supports Pakistan’s efforts to break free from ‘vicious cycle of debt’

State Department spokesperson says country should prioritise economic stability
US State Department spokesperson Matthew Miller responds to a query at a weekly press briefing on February 28, 2024. Screengrab via website
US State Department spokesperson Matthew Miller responds to a query at a weekly press briefing on February 28, 2024. Screengrab via website

The United States administration has stated that it would support Pakistan’s efforts to break free from the vicious cycle of debt and international financing as the South Asian country is expected to seek a new International Monetary Fund loan programme in the coming months.

“The long-term health of Pakistan’s government – or economy is crucial to its stability,” US State Department spokesperson Matthew Miller said in response to a query at a weekly press briefing on Wednesday.

He was asked about Imran Khan, the former prime minister, letter to the IMF in which he asked the lender to factor in countries’ political stability in any further bailout talks.

Khan asked the IMF to audit thirty per cent of the country’s seats in the general elections. The party told the Fund that it does not wish to ‘stand in the way’ of any funds being extended to Pakistan. But it added that only a popular government can implement reforms, especially related to taxation.

Miller in his response stated that the new Pakistani government should prioritise the economic situation because the policies over the next several months would be crucial to maintaining economic stability for Pakistanis.

“And we urge Pakistan to continue working with the IMF and other international financial institutions towards macroeconomic reforms,” he said.

Pakistan’s cash-strapped economy is struggling to stabilise from a financial crisis and secured a $3 billion standby arrangement from the IMF last summer.

Pakistan’s vulnerable external position means that securing financing from multilateral and bilateral partners will be one of the most urgent issues facing the next government, ratings agency Fitch said last week.

Earlier in the day, caretaker Finance Minister Shamshad Akhtar confirmed to Reuters that China has rolled over a $2 billion loan to Pakistan which was due in March.

Last week, a Pakistani official told Bloomberg News that Pakistan plans to seek a new loan of at least $6 billion from the IMF to help the incoming government repay billions in debt due this year.

At the weekly press briefing, a journalist also sought an update on Pakistani authorities approaching the US for consular access to four foreign nationals charged last week in the US for transporting suspected Iranian-made weapons on a vessel intercepted by US Naval forces in the Arabian Sea.

“I would defer that question to the Department of Justice. When people are taken into federal custody, they are held by the Department of Justice, and it is that department that decides matters of consular access,” he said.

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