Pakistan to pay all debts

Pakistan to pay all debts

ISLAMABAD (Reuters): Pakistan said on Sunday there was no chance of default on its US$30 billion debt because Moslem states had come to its rescue.

"The prophets of doom and gloom ought to wake up now and recognize the upbeat note of the situation," a spokesman for Prime Minister Nawaz Sharif's Muslim League said.

The spokesman told the official APP news agency that the Islamic Development Bank (IDB) had agreed to the setting up of a US$1.5 billion fund to help Pakistan out of a cash crisis.

"It was only natural that Pakistan should turn to its brothers in faith to overcome the ensuing difficulties, and they have rallied round as expected," the spokesman said.

The statement was issued as International Monetary Fund (IMF) experts in Islamabad held technical discussions on Pakistan's economic performance to assess the scope for resumption of a stalled $1.56 billion credit.

The Jeddah-based IDB is finalizing the fund for Pakistan to help it plug a balance of payments gap of $4.5 billion due by the end of the year.