Fresh IMF loan likely to repay previous one
11 October, 2012
ISLAMABAD: Pakistan's economic team led by Finance Minister Dr Abdul Hafeez Sheikh has reached Tokyo to attend annual meetings of International Monetary Fund (IMF) and World Bank wherein discussions regarding fresh loan programme from the Fund could start.
The annual meeting of IMF-World Bank has started in Tokyo from Tuesday wherein Finance Ministers from 188 countries including Pakistan are participating along with their delegations. Pakistan's economic team is likely to hold sideline meeting with officials of IMF and World Bank apart from attending annual meeting.Sources informed The Nation that Pakistan's team is likely to initiate discussions for seeking fresh IMF loan programme to repay the earlier taken loan that is putting pressure on the country's foreign exchange reserves.
Pakistan has to repay $2.9 billion to the IMF within the ongoing financial year 2012-13 that could deplete the country's foreign exchange reserves, which already shrunk to $14.9 billion from the higher side of over $18 billion of few months before.Pakistan did not ask for fresh programme in the recently ended talks with the IMF, as discussions were held under Post Programme Monitoring (PPM). However, sources were of the view that Pakistan could start discussion with IMF for the new programme otherwise the foreign reserves would further sag. Meanwhile, Pakistan could also seek Letter of Comfort (LoC) from the IMF that would help Islamabad in getting funds from other financial institutes like World Bank, Asian Development Bank and others.
Meanwhile, according to the statement issued here, the Finance Minister Dr Abdul Hafeez Sheikh met with the Managing Director of World Bank Sri MulyaniIndrawati and discussed Pakistan's economic situation and fiscal health and identified steps to address avenues that will be helpful for Pakistan's financial discipline and strengthen with consequent support to trade and industry.The Minister explained economic situation of Pakistan in detail highlighting the achievements of the government like containing expenditure and controlling inflation. Despite various constraints Pakistan has succeeded in achieving 20 per cent increase in tax collection. The Managing Director of World Bank has appreciated Pakistan efforts in bringing financial discipline and assured the Finance Minister of the World Bank's full help and support in achieving economic development in Pakistan.
The Finance Minister also attended the Common Wealth Finance Ministers' meeting and made interventions highlighting Pakistan's positive role in strengthening the mechanism under the Commonwealth fold.It might be mentioned here that countries participating in annual meeting of IMF-World Bank would share each other's experiences and issues and come up with new prospects on economic and financial problems. The other members of the delegation include Finance Secretary Wajid Rana, Governor State Bank of Pakistan Yaseen Anwar, Secretary Economic Affairs Division Javed Iqbal and Deputy Chairman Planning Commission Nadeem-ul-Haque.