ISLAMABAD: Following its legal obligations, the cash-starved government of Pakistan on Wednesday repaid another instalment worth $394 million to International Monetary Fund (IMF) on the account of Standby Arrangement (SBA) programme.
Pakistan has repaid $2.52 billion to the IMF in seventh instalments since February 2012. Sources said that Islamabad would repay the eighth instalment worth $1.1 billion to the International Monetary Fund (IMF) in February 2013 that would further deplete the country’s foreign exchange reserves, which are already under severe pressure. Foreign exchange of the country had already declined to around $14 billion in November 2012 from higher side of over $18 billion mainly due to heavy repayment to IMF.
Sources further said that country’s foreign reserves could go down to around $10 billion at the end of ongoing financial year 2012-13 after heavy repayments of $2.9 billion to the IMF during the ongoing financial year 2012-13. The country’s foreign exchange reserves would come further under pressure in next financial year 2013-14 when Pakistan would repay $3.4 billion to $3.8 billion to the IMF and there would be no other option but to seek fresh loan from the Fund in order to avert looming balance of payment crisis.
However, the government has not decided yet to approach to IMF for fresh programme to return the earlier loan. “The government has not decided yet to go to IMF for new programme”, said Rana Asad Amin, spokesperson of the Finance Ministry while talking to Media. He further said that we are engaged with IMF as like other member countries.
According to sources, a similar situation of foreign exchange reserves had compelled the government in 2008 to seek a $7.6 billion IMF bailout package, which was increased to $11.3 billion but the country was not eligible for the last two disbursements of $3.2 billion due to failure to comply with the performance criteria. The government was failed to bring reforms in General Sales Tax (GST) and power sector, which became the reason in suspending the programme. – Nation