Pakistan repays $391.8m to IMF under SBA
27 February, 2013
KARACHI: Pakistan on Tuesday paid an instalment of $391.8 million to the International Monetary Fund (IMF) under the Stand-by Arrangement (SBA) loan facility of a total of $7.80 billion it availed in March 2008.
KARACHI: Pakistan on Tuesday paid an instalment of $391.8 million to the International Monetary Fund (IMF) under the Stand-by Arrangement (SBA) loan facility of a total of $7.80 billion it availed in March 2008.
The repayment of the loan has taken a toll on the rupee's value against the dollar as it recorded the second lowest level of Rs 98.16 for buying against the dollar in the interbank market after the repayment.
In open market the dollar with an increase of four paisas to close at Rs 99.05 for buying, said money dealers.
This was the second phase repayment of the instalment of $531 million, according to the schedule agreed with the IMF. The first phase consisted of repayment of $140 million on February 11, which Pakistan met successfully.
The remaining amount due under IMF's SBA until September 2015 under special drawing rights (SDR) is $3,239 million.
Pakistan has paid the 10th instalment to IMF of $391.8 million, a spokesman of State Bank of Pakistan said.
With this payment, Pakistan has repaid a total of $3.23 billion to IMF since July 2012, chief spokesman of the central bank said.
Next instalment under IMF's SBA facility is due at end of May 2013, amounting to $258.4 million.
The IMF repayment is still putting pressure on Pakistan's shrinking forex reserves.
Currency experts said the rupee lost 40 percent of its value against the dollar since March 2008. The country was holding around two-and-a-half-month import bill amount, which it has to provide in shape of Letter of Credits (L/Cs), food import bills, edible oil import bills and crude oil bills.
So far Pakistan has repaid $2.57 billion, $1.5 million this fiscal year ending June 30, 2012.
The rupee is likely to remain under pressure on back of IMF repayments as the foreign exchange reserves have declined to $8.7 billion on January 31 from $10.8 billion at end-June 2012.
Pakistan is facing around 23 percent more repayment of IMF's SBA facility on back of sinking rupee against the dollar since last four years, currency experts said.
The country acquired the loan in 2008 after fragile economic conditions and for supporting the economy. Country got loan of $7.80 billion in March 2008 when the dollar-rupee value was around Rs 64 and the dollar once touched Rs 100.10 in open market, said Fazal Ahmad a foreign currency expert.
Pakistan has to pay more than $1.58 billion in excess against retiring loan with interest and hike in dollar value of $8.53 billion, he added.
The country has to repay IMF's SBA outstanding till fiscal year 2014-15 in remaining three instalments out of 12 different instalments from 2011-12.
Pakistan is paying more than 2.5 percent as interest on the loan every year and country is possibly facing a 5.6 percent increase in value of IMF loans repayment due to dollar-rupee parity in more than 30 months till 2015, he added.
Absence of foreign inflows in the economy and higher tendency in non- productive expenditures by the government on political grounds is also affecting rupee value negatively.
According to State Bank of Pakistan, further payments of $1.6 billion of IMF loan in the remaining four months of fiscal year 2012-13 and $3.2 billion in fiscal year 2013-14 do not help the situation either.
Fundamental weakness in the balance of payments is the core issue for continuous decline in the net capital and financial flows.
Repayment schedule :
Paid
$3.23bn
Remaining
$5.3bn
Total
$8.53bn
End. |
