Pakistan has formally asked the International Monetary Fund for a $7.6bn standby loan in return for economic reforms, the country’s de facto finance minister said.

The terms of the loan require Pakistan to undertake reforms that would reduce the government’s fiscal deficit to below 4 per cent of gross domestic product, down from more than 7 per cent in the financial year to June, said Shaukat Tarin, the official finance adviser to the prime minister.