Dollar-rupee parity: Pakistan has to repay more

[Blackwater]

Pakistan has to repay $7.82 b to the IMF against its received$7.6 b loan due to dollar-rupee parity.


An official of finance ministry who wished not to be named said that from recently ended financial year 2011-12 to end Fiscal Year 2014-15, Pakistan was expected to face a 3-5 percent increase in value of IMF loans repayment because of Pakistani rupee constant depression in the recent days and fear in the future as well.

The amount received $1.18 billion in Coalition Support Fund (CSF) from the US had given some space to the country's economic trouble shooter to repay installments to the IMF on monthly bases.

The official said the country's foreign exchange reserves will 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 International Monetary Fund (IMF) in fresh loan in current fiscal year 2012-13 to seek loan for the retirement of IMF's Stand-by Arrangement (SBA) facility.

"The economy of the country has been badly hit by huge government borrowing, power and gas crisis and uncertain political and law and order situation, said an economic expert said.

The burden of subsidies along with higher security-related expenditures exerted continuing pressure on the fiscal system and adjustment path was affected. The government failed to focus on growth-oriented policy for reducing unemployment in the country besides borrowing that should be reduced in order to bring down the interest rate.

The official said more foreign inflows were expected in the coming months from other donors especially after improvement in relations with the US. The US also disbursed $280 million for the energy sector this week.

Analysts however remained cautious, especially for next fiscal year, saying the government may have to negotiate another loan programme with the Fund to ensure smooth repayment of the remaining installments to the IMF.

Pakistan repaid $1.2 billion to IMF in last financial year 2011-12, out of the total loan of around $7.6 billion. Pakistan has to pay around $2.9 billion during ongoing financial year, $3.43 billion in 2013-14 and $1.35 billion in 2014-15 to retire IMF outstanding loans.

A similar situation of foreign exchange reserves had compelled the government in 2008 to seek a $7.6 billion IMF bailout package, which was increased to $11.3 billion but the country was not eligible for the last two disbursements of $3.2 billion due to failure to comply with the performance criteria.

Dunya News: Business:- Dollar-rupee parity: Pakistan has to repay more...

 

[sob]

Kala pani bhai,

The same problem is faced by India also. In the last 6 months Rupee has fallen by almost 15-18% against the Dollar.

 

[Blackwater]

Kala pani bhai,

The same problem is faced by India also. In the last 6 months Rupee has fallen by almost 15-18% against the Dollar.

sob bhai. Probelm wo nahi ha . probelm ha ki bhikhariyo ke paas 15B$ ka reserve ha out of that 7.6B$ wapas karna ha..

probelm yeah ha ki hamare bichre bhai kon se desh se bheeg mangege

 

[sob]

Sorry bhai missed that part.

Agla number bheek mangne ka kiss se

 

[thakur_ritesh]

This problem will only escalate for Pakistan and the brunt of it will be faced by the next government, who ever gets to form it.

Recent speculation, that Pakistan will find it hard to make the repayment, made the Pakistani rupee slide from 85 to over 94 or is it over 95(?), with over 7b usd to be repaid, it seems very likely that till the time there is some other country helping them out, the rupee should be trading, if not more, definitely somewhere between 110-120 to a dollar, and that should be a conservative estimate.

They will again be confronted by a situation similar to one they faced in '08.

Investing in dollar would be a good investment toll for Pakistanis, a 20% return would be very handsome return YoY.