Reports in Pakistan suggest that the government is planning to seek another loan from the IMF to repay existing loans from the Fund. Pakistan has received US$8bn of the US$11.3bn stand-by agreement (SBA) that was finalised in 2008. (The original agreement was for US$7.6bn, but the amount of the facility was increased in August 2009.) The IMF has halted the release of the remaining tranches of the SBA owing to the Pakistani government's failure to implement structural reforms-in particular, to introduce the revised general sales tax. The last disbursement was made in May 2010. Pakistan must begin repaying monies to the Fund in 2012, and repayments must be completed by 2016.

An IMF mission visited Islamabad in the first ten days of March to hold what it called "constructive discussions with government and central bank officials on the recent developments, the outlook for Pakistan's economy for the rest of fiscal year 2010/11 (July-June) and 2011/12, and on economic policies to restore macroeconomic stability". However, the statement, which was released after the Fund's visit, gave no indication of the future of the SBA, stating only that discussions on the reform programme would continue.

In late March, however, reports in the Pakistani media indicated that officials intend to re-open negotiations with the Fund in June, after it presents the budget for 2011/12. Three options are reportedly being considered: allowing the existing IMF-loan programme to continue (and extending it beyond its current expiry date of September 30th); merging the existing programme into a new one; or completing the existing programme and then entering into a new one.

Although any new amount borrowed from the IMF is likely to be relatively small, continued support from the Fund is crucial as it sends a positive signal to other lenders, notably the Asian Development Bank and the World Bank. However, the continued absence of structural reform means that the Fund's acquiescence in this purported plan is questionable. Pakistan's finance minister, Abdul Hafeez Shaikh, is scheduled to visit the US capital, Washington, in mid-April, and will hold talks with the IMF while he is there. The Pakistani government is reported to be focusing on boosting the direct tax take. The proportion of the population that pays income tax has barely changed in decades.

In the event that no further support is forthcoming from the IMF, the authorities would appear to have few other options, apart from perhaps hoping that either China or wealthy countries in the Gulf might consider stepping in to fill the void. There would be few takers were Pakistan to float a sovereign bond.