IMF praises Pakistan over repayments

Discussion in 'Pakistan' started by farhan_9909, Dec 16, 2012.

  1. farhan_9909

    farhan_9909 Tihar Jail Banned

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    KARACHI: The International Monetary Fund (IMF) on Friday applauded Pakistan’s track record of repaying its debt obligations and was confident that the trend was likely to continue.

    “Pakistan has an excellent track record on paying its obligation to the IMF on time and in full. We have every expectation that this will continue in the future,” an IMF spokeswoman told Dawn.

    The State Bank of Pakistan paid the seventh installment of SDR258.4 million, or about $394m, to the IMF last month, taking the total to $2.522 billion of the amount paid back to IMF since February.

    Pakistan has to pay SDR 4.14bn, or $6.13bn, from Feb 2013 to Sept 2015, which has become a critical issue as the central bank’s reserves went down to $8.51 billion during the week that ended on Dec. 7.

    “There have been no discussions with the authorities regarding any rescheduling of IMF repayments,” said the spokeswoman.

    There have been reports quoting Pakistan finance officials about talks with the IMF regarding deferred repayments due to constant depreciation of the rupee and depleting foreign exchange reserves.

    The rupee hit a fresh record low of Rs97.98 to the dollar in the interbank market on Friday. The IMF in its latest report also said that the State Bank’s monetary policy should focus on containing inflation and external risks.


    IMF praises Pakistan over repayments | DAWN.COM
     
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  3. blank_quest

    blank_quest Senior Member Senior Member

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  4. Ray

    Ray The Chairman Defence Professionals Moderator

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    Praising someone for paying up is rather an odd thing.

    Why did the IMF have doubts and when the payments were paid they were overjoyed?

    IMF should stop this type of attitude as if Asians are people who will bolt with the money and not repay!

    Very demeaning!
     
  5. Blackwater

    Blackwater Veteran Member Veteran Member

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    Point is not pakistan repaying IMF money. Question who paid on behalf of pakistan??:taunt::taunt::taunt:
     
  6. gokussj9

    gokussj9 Senior Member Senior Member

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    IMF warns Pakistan economy deteriorating | DAWN.COM

    This is the reason why IMF is happy to get its money back, as they are more or less
    sure of bankruptcy of Pakistan.
     
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  7. Blackwater

    Blackwater Veteran Member Veteran Member

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  8. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    Pakistani rupee continues to come under pressure. From 84 to a dollar at the start of last year, the rupee has lost around 17% and is trading over 97 to a dollar, with further pressure building up, and this at a time when Pakistan wasn't in much of a difficult position to do the repayments.

    The difference between then and future will be the strain that Pakistani rupee will face with repayments lined up and dwindling forex reserves, the extent of which Pakistan hasn't faced when the previous repayments were to be done.

    I see the IMF remark in different light, which being, they don't want to see further devaluation of the Pakistani rupee, which if it happens will further make a dollar expensive and more strain on Pakistani reserves, economy and rupee, all a vicious circle. The tale can be under stood from the fact that just in last 2 months the rupee has slid by 3 rupees.

    The IMF remark seems to be a signalling at the behest of the Pakistani finance team in the US to the trading community to not yet press the panic button, else Pakistani rupee trading anywhere between 110-120 to a dollar in no distant reality, and just waiting to happen around the corner.

    Apparently the toughest time will be seen by the care taker government and who so ever gets to form the next government there, and it seems inevitable that who ever forms the next government will have to eventually negotiate another loan with the IMF to stabilize the economy.
     
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  9. farhan_9909

    farhan_9909 Tihar Jail Banned

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    this govt in 5 years

    Rupee against dollar in 2008=66
    now=97

    Debt=35billions USD
    now=65billions USD(double than what we have taken in the last 65 years)

    Economic growth=more than 6% and even 8.4% in 2004-05
    now=just 3.7%
     
  10. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    Farhan,

    There isn’t a doubt that this government, led by the PPP, has shown utmost incapability in handling the affairs of the economy but I do see a few preceding events which only complicated the situation for them:

    Lal Masjid:
    This event was to be the start of the downfall of Musharraf’s regime and also the economy if closely watched. The event brought about an unrest across Pakistan, and with the dent in image of the then GoP, and the PA, the lawyers’ movement was to also pick pace, and with that significant resources of the then government were to be focused on taking control of all these events than focus on the economy. The economy was to start to take the toll as an immediate aftermath.

    Global Economy:
    Nov-Dec’07 was the start of another bad time for the global economy. Every economy globally was to be affected, even high growth economies like China and India were to be affected. All these bigger economies could easily pool in resources to give stimulus to their economies, but Pakistan wasn’t really sitting on any such luxury.

    Benazir Bhutto Assassination:
    This event was to take Sindh by storm if you recall. Large number of business were shut, there was rioting, huge business losses. This was the time when Pakistan’s image as an economic destination was to be severely impacted.

    No loan from the KSA, and the PRC:
    Highly unexpected, and I feel this was one reason why the present Pakistani government systematically tried to distance itself from the KSA and move more towards the UAE, and Iran in the region. Of course with India moving in quickly, Pakistan couldn’t have ignored the emerging situation and so they tried making amends.

    Wasted too much time in negotiating loan with the IMF:
    Most importantly, Pakistan wasted way too much time in going to the IMF and negotiating the loan with them. Some very precious time was lost.

    As a result of all this, there was to be run-away inflation, flight of capital heavily affecting the business sentiment in the country with direct immediate impact of Pakistani rupee which slid from 61 to a dollar to 80 within a matter of 12 months. PPP per se had little role to play in this slide, yes they should have moved in with lightning speed to wrest the arising problem but then CTs would have floated very quickly that the PPP was an American puppet and they were only keen on getting the IMF loan, and not try other means more so the Saudi and Chinese route when these two countries were sitting on heaps and heaps of money.

    The biggest failing of the PPP led government in my eyes was that they didn’t ever take any real initiatives to reforming the economy of most of its ills and they more or less allowed the status quo to continue, but still they were largely able to manage the otherwise run-away inflation, also if I am not mistaken, they have to an extent been able to address the outage problem, and it isn’t as much an election issue as it was some months back.
     
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