Post-program monitoring team of the International Monetary Fund (IMF) will hold meetings with Pakistani officials for three days in Dubai and Islamabad. Well-informed sources told Business Recorder that 'This is a normal "post program monitoring" mission scheduled for late September/early October. Discussions will take place in Dubai and in Islamabad".
The IMF team will monitor the recent Stand-By Arrangement (SBA) of IMF that commenced in November 2008 but due to the government's failure to implement key benchmarks that it had agreed with the Fund like the imposition of GST, eradicate the subsidies especially for the power sector and bringing the domestic borrowing to a certain limit, the program was formally suspended in 2011 though the last tranche was released more than a year earlier.
Pakistan received $3.1 billion from IMF on November 26, 2008, $847.1 million on April 1, 2009, $1200.2 million on August 7, 2009; $1.2 billion on December 23, 2009, and $1.13 billion on May 14, 2010.
It is being apprehended that in order to repay its loan, Pakistan may go for another new bail-out package with IMF. Sources said, "Pakistan will have to repay the IMF as per schedule even if it goes for a new loan program. All the scheduled repayments of Pakistan to the Fund are on an "obligation" basis. The repayments schedule will not be deferred even if the country succeeds in getting a new loan program from the Fund", sources revealed.
Pakistan has not requested a new loan program from the Fund so far but if it does succeed in getting a new bail out package from IMF, program lending from multilateral institutions like the World Bank and the Asian Development Bank (ADB) that has been suspended for the last two and a half years would be restored. Pakistan has to repay 4.9 billion SDRs to IMF from the year 2012 to 2016. According to data available on IMF's website, in the year 2012 Pakistan has to repay SDR 726.8 million which is the agreed loan repayment with SDR 39.9 million of accrued interest. The SDR is neither a currency, nor a claim on the IMF.
Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members; and second, by the IMF designating members with strong external positions to purchase SDRs from members with weak external positions. Under its Articles of Agreement (Article XV, Section 1, and Article XVIII), the IMF may allocate SDRs to member countries in proportion to their IMF quotas. Such an allocation provides each member with a costless, unconditional international reserve asset on which interest is neither earned nor paid.
In 2013 Pakistan will have to repay SDR 2.39 billion actual loan with SDR 41.61 million interest while in 2014, according to the repayments' schedule agreed with the IMF, Pakistan will repay SDR 1.4 billion as amount of loan with SDR 13.2 million interest; in 2015, SDR 303 million loan with SDR 2.2 million interest will be payable while in the year 2016, SDR 0.33 million interest will be repaid to the Fund.
According to the data available on website, under Stand-by Arrangement program SDR 7.2 billion was approved by the Fund to Pakistan on November 24, 2008 while the amount drawn is SDR 4.9 billion. For Poverty Reduction Growth Framework (PRGF) dated December 5, 2004, SDR 1.03 billion was approved and the amount drawn under this financial arrangement was SDR 861.4 million. Under the Stand-By arrangement program dated September 30, 2001, SDR 465 million was approved while the amount drawn was SDR 465 million.
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