WASHINGTON (Reuters) -- Pakistan has requested financial assistance from the International Monetary Fund (IMF) and talks on a loan program will begin in the next few days, IMF Managing Director Dominique Strauss-Kahn has said.
"A fund mission will begin discussions with the authorities within the next few days on a program aimed at strengthening economic stability and enhancing confidence in the financial system," Strauss-Kahn said in a statement, adding, "The amount of fund financing under a stand-by arrangement has yet to be determined. Financing could be made within the framework of the fund's emergency financing mechanism."
IMF and Pakistani authorities have been meeting in Dubai since October 21 to discuss details of the country's financial restructuring plan.
Pakistan needs $10 billion-$15 billion of support from foreign lenders, the country's newly appointed economic trouble-shooter said the same day.
It is widely believed that with an IMF program, bilateral donors will then also be willing to agree to giving the government money. The IMF has estimated that Pakistan has unmet funding needs of around $4 billion.
Like many emerging economies, Pakistan was badly hit by soaring global oil and food prices over the past year, but the new government's economic troubles were exacerbated by the failure of the previous administration to cut unsustainable subsidies.