ISLAMABAD: With serious pressure on balance of payment position, the country's economic managers are trying to persuade the United States to release $600 million on account of Coalition Support Fund (CSF) as quickly as possible.
A senior official told Business Recorder that the economic team was scheduled to meet senior officials of the US Department of Treasury for the disbursement of CSF by the end of December this year. The economic team, led by Finance Minister Dr Abdul Hafeez Sheikh, is currently in the US for strategic dialogue.
Other team members include Minister of State for Finance Saleem Mandviwalla, Governor State Bank of Pakistan Yaseen Anwar, Secretary Finance Abdul Wajid Rana and Chairman Federal Board of Revenue (FBR).
Pakistan is due to repay around $700 million in January and February next year under the International Monetary Fund's (IMF) 2008 Stand-By-Arrangement (SBA) to the and the economic team believes that if the CSF payment by the US was disbursed before the payment due to the IMF then further pressure on exchange rate would be averted.
Foreign exchange reserves declined to $13.9 billion in October 2012 - $9.7 billion SBP reserves and $4.2 billion banks reserves -subsequent to payment of $1 billion in interest and principle on foreign loans.
The government was banking on estimated foreign inflows of $2 billion to sustain the balance of payment position. However, the estimated $500 million on account of Euro Bonds and $850 million each from 3G license and from Etisalat as part of the deal for PTCL privatisation are unlikely to be realised in the current fiscal year.
The official was optimistic that the economic team would be able to ensure $600 million disbursement before IMF's next payment. He, however, conceded that there was pressure on foreign exchange reserves, but said it was largely because of media hype about foreign exchange reserves.
The official said that the economic team would hold meetings with the IFIs, especially with the IMF, World Bank, officials of the Obama Administration and US Department of Treasury. The team would explore possibilities of US assistance in the energy sector and other projects and termed the resumption of strategic dialogue as good for economy especially, he added.
Finance Ministry's spokesman Rana Asad Amin categorically denied that the economic team would be exploring the possibility of another International Monetary Fund (IMF) programme.
He said that the Chairman FBR would be briefing the IMF about the country's plan to increase the tax-to-GDP ratio through implementation of a three-year strategic plan. The purpose of briefing on tax measures is to assure the Fund that the country would be able to repay them their loan, he added.