Pakistan formally requested a loan from the International Monetary Fund (IMF) to stabilize its economy, a move that may result in protests by political and civil society groups. The newly installed Pakistani government is seeking a loan of between USD 6 billion and USD 12 billion from the IMF, along with other financial backers such as Saudi Arabia and China. Any IMF loan would likely come with conditions on restructuring Pakistan's economy and existing debt. The US has warned that IMF loans should not be used to pay off existing Chinese debt and has hinted at voting against the bailout.
The move to obtain an IMF loan, potentially the largest in the fund's history, may result in protests across the country. Opposition politicians staged a sit-in at the parliament house in Islamabad on Thursday, October 11, and workers in Awami National Party (ANP) held a protest in Peshawar and around Kyber-Pakhtunkhwa. Further protests are possible, particularly if the currency continues to devaluate and surrounding the visit of an IMF delegation in the coming weeks and any decision to approve or reject the loan.
Pakistan is currently experiencing a financial crisis with low foreign reserves and high existing debt payments. Additionally, the Pakistan rupee has dropped 7 percent since news of the loan broke. This would be the 13th loan from the IMF for Pakistan since the 1980s, though it has only successfully met all IMF loan conditions once. Pakistan has also borrowed billions from China for the China-Pakistan Economic Corridor (CPEC) infrastructure projects.
Individuals in Pakistan are advised to monitor developments to the situation and avoid public gatherings as a precaution. Protests may result in a heightened security presence and localized traffic disruptions.
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