Pakistan will repay $105 million to IMF
26 September, 2012
ISLAMABAD: The cash-starved government of Pakistan has to repay its fifth instalment of a loan it received from the International Monetary Fund (IMF) by October 1 2012, finance ministry sources said on Tuesday.
ISLAMABAD: The cash-starved government of Pakistan has to repay its fifth instalment of a loan it received from the International Monetary Fund (IMF) by October 1 2012, finance ministry sources said on Tuesday. Sources informed The Nation that Pakistan would repay the fifth instalment worth of $105 million by October 1 2012 following its legal obligations. Pakistan had already repaid $1.3 billion to the IMF in four instalments since February 2012. Sources said that State Bank of Pakistan (SBP) has made all arrangements in repaying the fifth instalment to IMF.
Sources further informed that Islamabad has to repay $2.9 billion to IMF within ongoing financial year 2012-13, which could lead to deplete the country's foreign exchange reserves that are already under pressure. Pakistan's foreign exchange reserves recorded at $14.864 billion in the week ending September 14, which were over $18 billion in one and half year before.It might be mentioned here that technical talks between Pakistan and International Monetary Fund (IMF) under Post Programme Monitoring (PPM) would start from today (Wednesday) in Dubai wherein both sides would discuss the Islamabad's capacity to repay its foreign loans to the IMF within the ongoing financial year 2012-13.Pakistan entered in a 34-month $11.3 billion IMF Stand-by Arrangement on November 24, 2008. It was augmented on August 7, 2009 and extended by nine months in December 2010.
The purpose of the loan programme was to stabilise the macroeconomy, bring structural reforms and restore investors' confidence. Upon failure to comply with the lending agency's requirement to improve economic fundamentals, the IMF suspended the programme in August 2010. Pakistan received around $7.48 billion under the programme with the last tranche of $1.13 billion received in May 2010. The government was failed to bring reforms in General Sales Tax (GST) and power sector, which became the reason in suspending the programme.