Foreign debts repayments may face troubles

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Foreign debts repayments may face troubles

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Pakistan may face unpleasant implications for exchange rate due to foreign debt repayments.

18 August,2012 06:14 pm

The approved current fiscal year 2012-13 financial year’s development budget and annual plan said the country’s gross official reserves may deplete to $8.24 billion by June 2013 which is 28 per cent or $3.2 billion, lower than what has been projected for last financial year 2011-12.An official working in the Finance ministry told “Online” that in current financial year 2012-13 unavoidable, international and domestic contractual and obligatory payments will be considered on case to case basis and relaxation if required may be allowed by the Finance Secretary The current account deficit – gap between total foreign receipts and payments are expected to widen to $5.3 billion or 2.1 per cent of total size of economy during ongoing fiscal year.According to the repayment schedule agreed between Pakistan and IMF, Pakistan will repay its obtain $7.6 billion to the IMF till the end of fiscal year 2014-15. The $11.3 billion SBA program had expired on September 30, 2011 and the last two trenches of $3.7 billion could not pay to Pakistan by IMF following Islamabad’s failure to pursue key reforms as well as the emergence of the revenue figures fiasco.Despite depressive economic situation of the country, the government had paid back total amount of $1.2 billion to International Monetary Fund during fiscal year 2011-12 from foreign currency reserves held by the State Bank of Pakistan (SBP).Pakistan had enter into a $11.3 billion programme in 2008 with IMF and got disbursements of about $7.6 billion, but failed to get the remaining $3.7 billion due to slippages in performance criteria, leading to suspension of the programme in May 2010 and was ended unsuccessfully on September 30,2011.