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| Pakistan set for key IMF talks | Pakistan set for key IMF talks |
| (about 3 hours later) | |
| Talks are due to begin in Dubai between the International Monetary Fund (IMF) and Pakistan, which faces the threat of defaulting on its foreign debt. | |
| The IMF says Pakistan needs $10bn over the next two years for loan repayments and to stabilise the economy. | The IMF says Pakistan needs $10bn over the next two years for loan repayments and to stabilise the economy. |
| Pakistani officials say they will only ask the IMF for money if other available options fail. | Pakistani officials say they will only ask the IMF for money if other available options fail. |
| Pakistan's traditional allies, China and Saudi Arabia, have so far refused its request for help. | Pakistan's traditional allies, China and Saudi Arabia, have so far refused its request for help. |
| Correspondents say the country is going through its worst economic crisis in a decade, with massive trade and budget deficits, plunging foreign currency reserves and capital flight. | Correspondents say the country is going through its worst economic crisis in a decade, with massive trade and budget deficits, plunging foreign currency reserves and capital flight. |
| 'No cash advance' | |
| Foreign exchange reserves in Pakistan have dropped by three quarters in the last year, and it is believed there are sufficient funds for just a few weeks of imports. | |
| The country also needs up to $3bn within a month to avoid defaulting on loans, the BBC's Ilyas Khan in Karachi says. | |
| A group of nations close to Pakistan called Friends of Pakistan met President Asif Zardari on Monday, but did not commit any cash support. | |
| "It is not going to be a cash advance for Pakistan," US Assistant Secretary for South Asia, Richard Boucher, said after the meeting. | |
| "It is going to be a strategic process in which Friends of Pakistan would look into what the Pakistani government is doing, what it is planning, and how could those efforts be supplemented," he said. | |
| Officials say that the Pakistani delegation which is meeting IMF officials in Dubai will seek endorsement for Pakistani plans to stabilise the economy. | |
| They believe a "positive signal" from the IMF may encourage international financial institutions and others to release funds which are already in the pipeline. | |
| These funds include a $1.5bn credit from the Asian Development Bank, of which about $500m has already been released. | |
| In addition, the World Bank, the Islamic Development Bank and the UK Department of International Development have approved a combined credit of $3.8bn. | |
| But is unclear whether this money will be available over the next month to stop Pakistan defaulting. |