ISLAMABAD: Pakistan would be required to take a decision to take a new International Monetary Fund (IMF) programme in June-July or October-November this year because the country would need to make a payment of SDR 1.685 billion to IMF by November 2013. Sources said that the next payment of SDR 557.862 million to the IMF as scheduled under the 2008 Stand-By-Arrangement was due in the next two months of the current fiscal year: SDR 382.344 million in May and SDR175.518 million in June this year.
The repayment to the IMF in the current fiscal year would compound the balance of payment problems because budgeted external inflows have not materialised. The best time for the elected government is June-July 2013 to take new IMF programme because any delay would create uncertainty about the external account and consequently there would be greater pressure on the economy.
Pakistan's projected due payment to the IMF is SDR 1.11 billion in the first five months of the next fiscal year (July-November 2013), which would significantly reduce foreign exchange reserves, making it difficult for economic managers to manage the balance of payment position. The country's foreign exchange reserves have already gone below $10 billion with official forex reserves dipping below $6 billion.
Sources said that the projected repayment of SDR1.11 billion to the IMF in the first five months of next fiscal year include SDR17.228 million in July 2013, SDR 458.498 million in August 2013, SDR95.837 million in September 2013 and SDR 71.066 million in October 2013. The country would be required to make payment of SDR467.328 million in November 2013.
An official said that it would be difficult for the elected government to avoid a new IMF programme in November 2013 if it decides not to take the new programme in June-July 2013. He further added that remittances have provided support to offset trade deficit gap but due repayment to the IMF in the next five months would drain the foreign exchange reserves to a level that the elected government would be compelled to approach the IMF for a new programme. However, they said that the Fund conditions would be very stringent and the country may be asked to fulfil some prior actions especially with respect to power sector and tax reforms.
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