The first round of talks between Pakistan and the International Monetary Fund (IMF) will start from tomorrow (Tuesday) in Dubai, where Pakistan’s ability to pay back a remaining debt of approximately $6.4 billion will be reviewed.
During the weeklong talks, an IMF team will also arrive in Islamabad to hold policy-level dialogue which will be a significant part of the parleys that involve meetings with President Asif Ali Zardari and Prime Minister Raja Pervaiz Ashraf, according to an official.
The official said that the $1.18 billion amount received in Coalition Support Fund (CSF) from the US had given some space to the country’s economic handlers to repay installments to the IMF on monthly bases, and more foreign inflows were expected in the coming months from other donors especially after improvement in relations with the US, which had also disbursed $280 million for the energy sector last month. The official said the country’s foreign exchange reserves would continue to face pressure due to re-payment of IMF loans in the next more than three years, as Pakistan is likely to go to the IMF in the current fiscal year to seek another loan for the retirement of IMF’s Stand-by Arrangement (SBA) facility.
Despite depressive economic situation of the country, the government had paid back a total amount of $1.2 billion to the IMF during last fiscal year 2011-12 from foreign currency reserves held by the State Bank of Pakistan (SBP).
According to the repayment schedule agreed between Pakistan and IMF, Pakistan will repay $7.6 billion to the IMF until the end of the 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 be paid to Pakistan by the IMF following Islamabad’s failure to pursue key reforms as well as the emergence of the revenue figures fiasco. Pakistan had entered into a $11.3 billion program in 2008 with the 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 program in May 2010, and was ended unsuccessfully on September 30,2011.