In a fresh setback to the country’s depleting dollar reserves Pakistan Wednesday “successfully” repaid a seventh tranche of over $394 million to the International Monetary Fund (IMF). A central bank spokesman said Wednesday witnessed the repayment of SDR 258.4 million, which is equivalent to $394.3million, to the Fund under the 2008’s $ 11.3 billion Stand-By Arrangement (SBA) of which Pakistan has received only $ 8.3 billion. In 2008, Islamabad had sought a bailout package from the IMF to avoid a possible default on the Balance of Payment front.
“Seventh installment under IMF/SBA facility amounting to SDR 258.4 million, equivalent of US$394.3 million, has been successfully made today,” said Syed Wasimuddin, chief spokesman of the State Bank of Pakistan.
With this transfer Pakistan’s repayments to the IMF since February 2012 total at $ 2.522 billion. “With payment of 7th installment on 21 November 2012, Pakistan to-date has paid SDRs 1,644 million equivalent US$ 2,522 million to IMF since Feb-2012,” said the spokesman.
The dollar-hungry Pakistan would be repaying the next, 8th, installment to its lenders in the IMF after some three months at the end of February next year.
Such huge repayments have been a permanent drain on the foreign exchange reserves of the funds-starved Pakistan which is already breathing hard under heavy foreign debts which, according to official data, have swelled beyond $ 62 billion.
What is alarming is the fact that the country’s dollar reserves have contracted to single digit, below $ 9 billion.
The State Bank last Thursday reported that on November 9 the country’s holding of the greenback stood at $ 13.84 billion. Of this total, the central bank’s reserves amount to $ 9.24 billion while that of the commercial banks stand at $ 4.60 billion.
Except worker remittances that are being received on average to the tune of $ 1 billion every month, all other indicators on Pakistan’s Balance of Payment list rest in the red zone.
The analysts believe that negatives like poor inflows of foreign investment seem to be offsetting the positive impact of positives like a $258 million surplus in the country’s current account balance.
This surplus, however, could only be achieved after the United States, Pakistan’s non-Nato ally in the War on Terror, reimbursed $ 1.118 billion to Islamabad under the long-withheld Coalition Support Fund in early August this year. The economic observers believe that such short-term gains were far from being enough to put Pakistan’s troubled external sector back on track.
The received CSF money, the analysts view, was Pakistan’s own money and was hardly enough to repay the IMF tranches due in the months ahead.
Pakistan’s IMF debt burden shrinks by $2.522b with 7th repayment
