ISLAMABAD: There is no risk of Pakistan defaulting on international debts as funds are being lined up to cover a balance of payments deficit and rebuild currency reserves, the country’s newly appointed economic troubleshooter said yesterday.

“Now, there is no danger,” Shaukat Tarin told a news conference a day after returning from overseas visits to Washington and Beijing to drum up support.

Tarin, appointed last week as adviser to the prime minister on economic affairs, attended the annual International Monetary Fund meeting in Washington and later joined President Asif Ali Zardari on a visit to China earlier this week. “If we want to go to the IMF, we can ... but only as a backup,” Tarin said.

The official said he planned to bridge a financing gap for the balance of payments deficit in the fiscal year ending June 30, 2009, mainly through other multilateral lenders front-loading disbursements from development assistance programs.

The Islamic Development Bank and Britain’s Department for International Development are also expected to virtually double their planned assistance, he said. There was also a plan to securitize workers’ remittances from overseas to the tune of $1.5-2.0 billion.

“We think we will be in a very good shape .... within the next 30 to 60 days,” Tarin said of the prospects of sewing up funds to cover a financing gap that the IMF estimates at up to $4.5 billion, and Pakistan reckons at $3.0 billion.

Neither Tarin nor Foreign Minister Shah Mehmood Qureshi divulged whether China had given any firm commitments on loans, though there were uncorroborated media reports that Zardari asked China for close to $3 billion.

Potential donors, including China, are expected to gather in Abu Dhabi in mid-November, under the banner “Friends of Pakistan.”

Qureshi told the news conference that senior Chinese bankers were coming to assess Pakistan’s needs, and Chinese firms had pledged to invest $1 billion by June 2009.

Aside from seeking financial support from multilateral lenders and friendly governments, Pakistan has asked oil suppliers in the Gulf to accept deferred payments.

The international bond market had already priced in a Pakistani default on a $500 million bond maturing in February, though there had been widespread expectation that the international community would rally round a nuclear-armed Muslim nation returning to democracy, while under threat from religious militancy.

Pakistan’s stock market has been moribund since late August, when authorities imposed a floor that blocked off investors exiting a market that has dropped 35 percent this year.

Pakistan’s rupee hit a record low of 84.40 to the dollar on Friday, and as of Saturday had lost 25 percent of its value since the start of the year.

Tarin said the rupee had been overvalued previously, and that was being remedied by a more realistic approach.

Analysts say Pakistan has had little option other than to let the rupee weaken as its currency reserves are dwindling fast.