IMF Loan Ruled Out by Pakistan Until After National Elections

(Bloomberg) -- Pakistan’s economy faces “some very daunting challenges,” but the nation’s interim government won’t approach the International Monetary Fund for support, according to caretaker Finance Minister Shamshad Akhtar.

The decision whether to approach the IMF for a bailout loan will have to be taken by the new government after a national election on July 25, Akhtar said at her first press briefing in Islamabad on Tuesday. Akhtar is part of a caretaker administration that this month took over running South Asia’s second largest economy until the ballot.

Pakistan is facing increasing economic pressure with its fiscal and current-account deficits breaching targets that have led it to devalue its currency this week for a third time since December. The rupee is Asia’s worst-performing currency this year and Pakistan’s foreign-exchange reserves have dropped by 36 percent to $10 billion in the past year.

The country’s fiscal deficit estimate is 6.1 percent for year ending June compared with a 4.1 percent target, Akhtar said. The deficit is higher than 5.4 percent estimate the previous government reported in April.

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