Moody’s: IMF program to help improve Pakistan’s economy

Monday, July 8th, 2013 11:59:51 by

The International Financial Rating Agency Moody’s says the newly agreed International Monetary Fund program with Pakistan will help improve the country’s economy and development.

In its report‚ the rating agency says with the payment of two point one billion dollars installment of loan by Pakistan through IMF will help reduce budget deficit.

It said the payment of installment will also help in reducing current deficit of the country.

The report expresses hope that the IMF board will approve the loan program with Pakistan.

According to Moody’s‚ Pakistan’s foreign exchange reserves on 21st of June stood at 6.3 billion dollars and payment of two point one billion dollar debt installment can increase pressure on its reserves.

The IMF last week agreed to provide Pakistan with a bailout loan package of $5.3 billion for the next three years under the Extended Fund Facility (EFF).

The agreement will be presented to the board of executive directors of the IMF in the first week of October for final approval.

Pakistan had requested the bank to extend a loan of $7.3 billion to stabilise its ailing economy. 

Finance Minister Ishaq Dar says Pakistan had requested the IMF management to increase the present level of access of 348% of the quota (5.3 billion) to 500% of quota ($7.3 billion) together with an appropriate front loading to match Pakistan’s obligations towards the Fund under the previous programme.

The prior actions would also include the phasing out of the tariff deferential subsidy in the next three years so that the poorest of the poor (lifeline consumers) are not affected. “The modus operandi in the energy policy that the prime minister is going to announce soon will be unveiled,” said Dar.

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