Pakistan on Friday has paid the fourth instalment of its loan from the International Monetary Fund (IMF), the chief spokesman for the State Bank of Pakistan (SBP) said on Friday.
Pakistan received around $7.48 billion under the loan programme with the last tranche of $1.13 billion received in May 2010.
“An amount of $397.2 million has been paid to the IMF as the fourth instalment against the Stand-by Arrangement,” said Syed Wasimuddin.
Originally, Pakistan entered in a 34-month $11.3 billion IMF Stand-by Arrangement on November 24, 2008. It was augmented on August 7, 2009 and extended by nine months in December 2010. The purpose of the loan programme was to stabilise the macroeconomy, bring structural reforms and restore investors’ confidence. Upon failure to comply with the lending agency’s requirement to improve economic fundamentals, the IMF suspended the programme in August 2010.
Since February 2012, Pakistan has already paid three instalments against the loan and with the payment of this $397.2 million instalment, the total scheduled payment will reach $1.29 billion.
“Pakistan has already paid $401 million in February, $392 million in May and $108 million in June,” said Wasimuddin.
According to the loan payment schedule available on the IMF website, Pakistan will repay SDR 1.4799 million ($2.24 billion at 1 SDR=$1.51467 as on August 22) during 2012. Pakistan has to pay over $420 million in August, including the principal and interest payments. Similarly large payments are due in November.
Analysts said that the balance of payments position of the country will remain under pressure due to the IMF repayment, despite inflows from the United States under the Coalition Support Fund (CSF) head and project aid for Pakistan’s energy sector.
“The balance of payments would remain under pressure due to bulk repayments to the IMF during the first half of the current fiscal year,” said Khurram Schezad, head of research at InvestCap.
“However, the recent transfers from the US will provide short-term relief to Pakistan’s stressed balance of payments,” he added.
After fresh inflows, total foreign exchange reserves of Pakistan improved to over $15.69 billion following a fall to $14.57 billion by the week ended July 27. Total foreign exchange reserves of the country peaked at $18.313 billion by the week ended July 30, 2011. However, they waned continuously due to scheduled debt repayments and high import payments.
The latest data on foreign exchange reserves shows that reserves again slipped to $15.298 billion by the week ended August 10 due to debt obligations.