Pakistan is seeking loans and rescheduling of debts to bridge a balance of payments gap estimated at around five billion dollars.

The process was interrupted in October when the IMF postponed the talks over the Pakistan government's power tariff row with independent power producers (IPPS) and its decision to cut electricity rates for the public.

The dispute with IPPS, set up by foreign investors, appears to have been eased after the government privately agreed to relax pressure on the companies to reduce rates payable under the contracts, source said.

The government has appointed a new committee for negotiations with the IPPS in a move seen as linked to criticism of the handling of the issue by a previous team.

Officials said the eight-member IMF delegation led by A Eken would hold talks here for 10 days.

The IMF isbelieved to have proposed a set of fiscal measures it wants Pakistan to implement which will be discussed during the meeting.

Pakistan's foreign exchange reserves have dipped to around 500 million dollars from 1.43 billion dollars about five months ago.

The fall was attributed to international sanctions imposed against India and Pakistan after their nuclear tests and stoppage of lending by multilateral institutions.