Pakistan receives further $1.2 bn from IMF

Pakistan receives further $1.2 bn from IMF
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First Published: Wed, Aug 12 2009. 02 52 PM IST
Updated: Wed, Aug 12 2009. 02 52 PM IST
Karachi: Pakistan has received $1.2 billion from the International Monetary Fund (IMF), the third tranche of an emergency loan facility agreed last year, the central bank said on Wednesday.
Last week, the IMF increased its loan to Pakistan to $11.3 billion under an economic programme first agreed in November 2008, to avert a balance of payments crisis.
“We have received $1.2 billion from the IMF,” Syed Wasimuddin, chief spokesman of the State Bank of Pakistan said.
The IMF initially provided a $7.6 billion emergency loan package. The first $3.1 billion tranche was disbursed in November and a further $848 million was released in April.
Aninda Mitra, Moody’s sovereign analyst for Pakistan, welcomed the increase of the loan.
“It goes to addressing some of the uncertainty that continued to linger in view of lack of clarity about the flows through the budget from the ‘Friends of Pakistan’ pledges,” Mitra said, referring to a donor group made up of friendly governments and multilateral lenders.
Moody’s Investors Service confirmed a negative outlook in December for Pakistan’s B3 sovereign bond ratings.
Mitra said Moody’s was monitoring Pakistan closely and waiting for the government to clarify how the additional money would be used in the budget.
Mitra also said the increased funding would bring Pakistan’s foreign exchange reserves “to the extent that I think it will allow Pakistan to withstand further deceleration of private capital inflows.”
The nation’s reserves fell by $50 million in the week to 1 August to $11.72 billion, the fourth straight weekly fall.
The latest IMF disbursment will be reflected in data due next week.
“The release of $1.2 billion third tranche of the IMF loan will help further strengthen the forex reserve position and should support the rupee in the short term,” said Sayem Ali, economist at Standard Chartered Bank.
The rupee was steady at 82.86/96 to the dollar in early trade, but dealers expect it to weaken by another 2 to 3% this year on increased dollar demand from oil imports.
The rupee has lost 4.5% this year after plunging 22.1% in 2008.
Pakistan also received a record $747.22 million in remittances from its citizens overseas in July, compared with $627.21 million in the same month last year, the State Bank of Pakistan said late on Tuesday.
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First Published: Wed, Aug 12 2009. 02 52 PM IST