"The government of Pakistan and IMF have reached an agreement for a three-year programme of at least 5.3 billion dollars under an extended fund facility," Finance Minister Ishaq Dar announced during a joint
press conference with the IMF mission here.
The minister said that the mutually agreed markup rate for the loan had been set at 3 percent.
Replying to a question, Dar said the new government had no choice but to borrow to avoid a balance of payments crisis.
"The borrowed money will be used to service external debts as we just cannot let Pakistan default on its payments, said he.
"We have not carried the begging bowl in our hands nor are we getting a grant, Pakistan is a member of IMF," Dar said.
Dar said the Pakistan had targeted a fiscal deficit of 4 of gross domestic product (GDP) in the next three years.
To a question he said that the federal government could not tax the agriculture sector as it was a provincial matter.
Finance minister also said that the loss-making state-owned enterprises (SOEs) would be restructured to help boost the economy.
Speaking on the occasion, IMF mission chief, Jeffrey Franks, said the loan agreement would be formally approved by Fund's executive board in early September. Monitoring Desk
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