Govt not mulling to contact IMF to stabilise reserves

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ISLAMABAD - Pakistan has not yet decided to approach International Monetary Fund (IMF) for fresh programme/reschedule the loan repayment to stabilise the depleting foreign exchange reserves, as government is heavily relying on possible reimbursement of Coalition Support Fund, auction of 3G licences and Eurobond to build the reserves to some extent. A top official of the finance ministry has informed TheNation on Wednesday that government is not considering to approach the IMF at present for fresh programme to build the foreign exchange reserves that are on the declining side due to heavy repayment to the Fund. On a question about the rescheduling the loan repayment, he said, “IMF does not reschedule loan repayments”.

He was of the view that government has several other options that could build the country’s foreign exchange reserves during the ongoing financial year 2012-13, which currently decline to $13.50 billion in last week. Pakistan is expecting to receive around $2 to $2.5 billion under different heads within current fiscal year. He further informed that Pakistan is currently relying on reimbursement of $700 million from United States under the head of Coalition Support Fund (CSF), $800 million by auctioning the 3G licences and $500 million by introducing the Eurobonds within the ongoing financial year 2012-13. The official further informed that Pakistan could also ask Islamic Development Bank (IDB) for loan of $500 million.

Another official of ministry has informed that Pakistan would approach IMF after consultation with political leadership of the country.

It is worth mentioning here that country’s foreign exchange reserves sharply depleting due to heavy repayment to the IMF since February 2012 that fell to a three-year low of $13.5 billion. Pakistan has so far repaid around $2.4 to $2.5 billion to the IMF since February 2012 and it would further repay around $1.7 billion during the fiscal year to be ended on June 30.

Analysts said that reserves have fallen to an alarming level and are only sufficient to cover just less than three months of import and debt repayments. The official international reserves would continue to come under pressure from continued loan repayments, they added. The IMF and scheduled debt repayments are draining foreign exchange reserves.


Courtesy: The Nation

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