Repayment of 14th instalment of Stand-By Arrangement (SBA) to International Monetary Fund (IMF) worth some $390 million by Pakistan is due in the last week of this month. Sources in Ministry of Finance told Business Recorder on Wednesday that despite challenge of depleting forex reserves, the country will pay next SBA instalment to IMF as per schedule and not a single day delay is expected in this regard.
"Although Pakistan is facing many challenges on economic front, including rising current account deficit and decline in the foreign reserve, arrangements have been made to repay 14th instalment on time," they added. The country''s forex reserves are on decline, however still Pakistan is in position to fulfil its commitment with international financial institutions, they said and added that like previous practices, next repayment will also be made from reserves held by State Bank of Pakistan (SBP).
As per payment schedule already agreed between Pakistan and IMF, cumulatively 14th instalment of SBA loan is due on May 24, 2013. "Pakistan is required to pay Special Drawing Rights (SDR) 258.425 million to IMF on account of next repayment of SBA programme. This amount in term of dollar calculated approximately $390 million," they informed.
Talking about the interest payments, they said that the due amount is alone principle amount of IMF loan, while interest on the SBA programme is being paid on quarterly basis by the central bank. This will be second payment under the SBA programme to Fund during this month as 13th instalment of SBA loan worth SDR 95.837 million was paid by Pakistan to IMF on May 10, 2013. Besides this another payment of SDR 17.22 million was also paid to IMF on account of Extended Credit Facility (ECF) on the same date. With payment of 14th tranche, two more SBA instalments are also due in June this year, they informed.
Since June 2012, the country''s foreign reserves are depleting gradually and fall to $11.86 billion level as on May 3, 2013 from $15.23 billion as on June 29, 2012. The complete declined has witnessed in SBP''s reserves, which have decline to $6.77 billion from $10.801 billion. During this fiscal year Pakistan received two payments of $1.118 billion from US on account of Collation Support Fund (CSF). These inflows have strengthened the country''s foreign exchange reserves. However, presently the country is completely relying on the home remittances sent by overseas Pakistanis.
It may be mentioned here that Pakistan re-joined IMF programme in November 2008 to avoid default as the country''s reserves reached lowest level of $6 billion in October 2008 followed by higher current account deficit. IMF programme was not completed as Pakistan failed to meet IMF conditions that resulted in expiry of the programme in September 2011. The last tranche of IMF loan under SBA was received on September 17, 2010. Out of the total agreed amount of SDR 7.236 billion ($11.350 billion), Pakistan had received SDR 4.936 billion ($7.433 billion). As per agreement and repayment schedule agreed between Pakistan and IMF, the country will repay total loan to the IMF by the end of fiscal year 2014-15.