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Dollar-rupee parity: Pakistan has to repay more

Dunya News

Pakistan has to repay $7.82 b to the IMF against its received$7.6 b loan due to dollar-rupee parity.

An official of finance ministry who wished not to be named said that from recently ended financial year 2011-12 to end Fiscal Year 2014-15, Pakistan was expected to face a 3-5 percent increase in value of IMF loans repayment because of Pakistani rupee constant depression in the recent days and fear in the future as well.The amount received $1.18 billion in Coalition Support Fund (CSF) from the US had given some space to the country’s economic trouble shooter to repay installments to the IMF on monthly bases.The official said the country’s foreign exchange reserves will continue to face pressure due to re-payment of IMF loans in the next more than three years as Pakistan is likely to go to the International Monetary Fund (IMF) in fresh loan in current fiscal year 2012-13 to seek loan for the retirement of IMF’s Stand-by Arrangement (SBA) facility.“The economy of the country has been badly hit by huge government borrowing, power and gas crisis and uncertain political and law and order situation, said an economic expert said.The burden of subsidies along with higher security-related expenditures exerted continuing pressure on the fiscal system and adjustment path was affected. The government failed to focus on growth-oriented policy for reducing unemployment in the country besides borrowing that should be reduced in order to bring down the interest rate.The official said more foreign inflows were expected in the coming months from other donors especially after improvement in relations with the US. The US also disbursed $280 million for the energy sector this week.Analysts however remained cautious, especially for next fiscal year, saying the government may have to negotiate another loan programme with the Fund to ensure smooth repayment of the remaining installments to the IMF.Pakistan repaid $1.2 billion to IMF in last financial year 2011-12, out of the total loan of around $7.6 billion. Pakistan has to pay around $2.9 billion during ongoing financial year, $3.43 billion in 2013-14 and $1.35 billion in 2014-15 to retire IMF outstanding loans.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.