`N` may not go to IMF right away

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‘N’ may not go to IMF right away

ISLAMABAD - The upcoming Pakistan Muslim League Nawaz (PML-N) government might not approach International Monetary Fund (IMF) immediately, as it would go for alternative measures to build the country’s depleting foreign exchange reserves in short run period.

Sources in finance ministry said that new government would not require approaching IMF in short run, if it could easily manage to improve the balance of payment situation by auctioning 3G licences, to recover dues from Etisalat for privatising Pakistan Telecommunication Company Limited (PTCL), auctioning Eurobond and to convince United States to release dues under Coalition Support Fund (CSF).

According to the rough estimates, Pakistan could generate around $3 billion in short run through above measures. It is projected that Pakistan could generate $800 million by auctioning of 3G licence, $800 million from privatisation of Pakistan Telecommunication Company Limited (PTCL), $500 million from auctioning Eurobond and $600 million from United States under coalition support fund (CSF) in short run period of three to four months. Sources said that position of foreign exchange reserves would be sufficient to manage for two to three months if new government does so.

It is worth mentioning here that Pakistan’s foreign exchange reserves are under severe pressure due to heavy repayment to IMF. The country’s reserves stood at $11.623 billion wherein central bank held $6.564 billion and net foreign reserves held by banks (other than SBP) are $ 5.059 billion.

According to the payments’ schedule available on the IMF website, about $450 million is due to be paid to the International Monetary Fund (IMF) by June 30 this year. Pakistan has paid a total of $582.68 million worth of debt to the IMF in the month of May, 2013. The problem would start in the second quarter of next fiscal year when country would be required to repay about $1.685 billion SDR to IMF.

According to the reports, Pakistan is due to pay IMF SDR 1.11 billion in the first five months of next fiscal year (July-November 2013) which is when foreign inflows would be required. The due payment to the IMF is as follows: 17.228 million SDR in July this year, 458.498 million SDR in August 2013, 95.837 million SDR in September 2013, 71.066 million SDR in October 2013 and 467.328 million SDR in November 2013.

Courtesy:  Nation

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