ISLAMABAD: The government plans to get fourth and fifth tranche of loan from International Monetary Fund (IMF) all together in December under the Extended Fund Facility (EFF).
An Extended Fund Facility with IMF provides assistance in support of comprehensive programs that include policies of the scope and character required to correct structural imbalances over an extended period. It has a comparatively longer repayment period of 4½ to 10 years, with repayments in twelve equal semiannual installments.
Pakistan entered into an extended fund facility (EFF) program with IMF on September 4, 2013. EFF is a 36-month extended arrangement for $ 6.64 billion. First tranche of $544.5 million became available on September 6, 2013, and the remainder will be evenly phased thereafter subject to quarterly reviews.
In this regard well placed source told Customs Today that meeting between Finance Minister and IMF mission held last month in Dubai could not be proved fruitful because of the prevailing political situation in the country. Finance Minister had to rush back to Islamabad in haste without taking the said meeting to any concrete conclusion.
Therefore now government has decided to present reports about implementation of IMF program for fourth and fifth quarterly review before IMF team in end of October or November simultaneously with an expectation of getting $1.10 billion in return.
In the prevailing political turmoil it was not possible for the government to fulfill all the conditions on economic reforms agreed while entering in the program; especially withdrawal of subsidies on power as well as grant of autonomy to the State Bank of Pakistan (SBP).
However, the source said that government hoped to convince the IMF team on partial implementation of the program. There are chances that government will withdraw subsidy from power next month to fulfill the condition which may be a hard decision for the government.
It is pertinent to note here that fourth quarterly review (April-June was scheduled to be discussed in August and now fifth quarterly review (July-September) is about the discussed between finance mangers and IMF mission in October or November.
