ISLAMABAD - Following the legal obligations, cash-starved government on Friday repaid third instalment worth $107.5 million of Stand-By Arrangement (SBA) to the International Monetary Fund (IMF), Finance Ministry official told.
Pakistan was legally bound to repay almost one billion dollar to International Monetary Fund (IMF) under Stand-By Arrangement (SBA) during outgoing financial year 2011-12.
According to the details, Pakistan had repaid total three instalments worth $908.4 million to IMF on account of repayment of SBA during fiscal year 2011-12. Out of these three, two instalments worth $793 have successfully been paid in third and fourth quarter of the outgoing financial year and remaining one was repaid on Friday.
Sources said that this payment is only a third instalment of the principle amount, while interest on the SBA is already being paid by the central bank on a quarterly basis.
It might be recalled here that Pakistan has not been able to meet performance criteria agreed with the IMF under $11.3 billion Stand-by Arrangement (SBA) including fiscal and power sector reforms, introduction of Reformed General Sales Tax (RGST) in integrated mode. Due to this SBA could not move ahead to its actual conclusion and Pakistan did not get last two tranches worth of $3.4 billion of the SBA.
The government has paid third instalment from foreign currency reserves held by State Bank of Pakistan, which resulting in gradually depleting country’s foreign exchange reserves that declined to less than $15 billion as on June 22, 2012 compared to $16 billion as on May 25, 2012. Sources said that balance of payments will remain under pressure in the next financial year 2012-13 due to external debt repayments including repayments to the IMF, a declining trend of export quantum, rising international oil prices and weak financial inflows. Gross reserves of the State Bank of Pakistan (SBP) are likely to deplete in the fiscal year to come 2012-13, as Pakistan has to repay $3.218 billion to the IMF in financial year 2012-13.
Similarly, $3.053 billion would be paid in the financial year 2013-14.