Pakistan has no alternative to taking IMF money says advisor

By Sahar Ahmed

KARACHI (Reuters) - Pakistan's economic troubleshooter believes that the country has no alternative to seeking money from the International Monetary Fund to cope with dwindling foreign reserves and a balance-of-payments crisis.

Pakistan, a nuclear-armed U.S. ally, is facing a balance of payments crisis and has been in talks with the IMF since last week. The talks in Dubai had concluded and more discussions would be held in the next few days, the IMF said.

"We know IMF programmes harm nations financially. But, we have no other option. Even then, we shall accept their programme on our terms," Shaukat Tarin, the prime minister's top economic adviser, told the Senate late on Wednesday.

"I would not like the IMF programme, if you ask me. But we are sitting on a monster, facing a trade deficit of $20 billion (12.2 billion pounds) and current account deficit of $1.5 billion," said Tarin, according to the state-run APP news agency. .

Tarin was not available for comment on Thursday and the IMF gave no detail of the talks.

According to a government official, Pakistan had asked the IMF to agree to put off, at least until January, any increase in interest rates.

Pakistan needs urgent help as its foreign reserves dwindled to about six weeks of import cover. The IMF had endorsed a financial plan drawn up by the government, Tarin said.

Pakistan's economic woes began before the global financial crisis set in but analysts say the crisis has compounded Pakistan's difficulties by making donors reluctant to step in.