ISLAMABAD: The Executive Board of the International Monetary Fund (IMF) is scheduled to meet on June 27 to approve disbursement of $510 million to Pakistan that would jack up the country’s foreign exchange reserves beyond $22 billion by end of current fiscal year.
Tokhir N Mirzoev, the IMF Resident Representative in Islamabad, confirmed the IMF board is expected to meet on June 27 to consider Pakistan’s case for disbursement of next tranche.
He said the IMF staff was engaged in preparing reports for the executive board on the basis of latest economic and fiscal situation and the budget announced early this month.
A government official said Pakistan and the IMF had already reached a staff-level agreement on third quarter performance of the government and broad line of federal budget strategy and targets for 2016-17 and hoped the $510m tranche would stand transferred to Pakistan’s account well before the close of fiscal year ending on June 30.
According to Finance Minister Ishaq Dar, Pakistan’s performance in the third quarter (ending March 30, 2016) of the outgoing fiscal year was “highly satisfactory” and successful completion of 11th review was indicative of the government’s strong commitment in implementing difficult structural reforms in areas of taxation, energy, monetary and financial sectors and public sector enterprises.
In line with IMF staff level agreement, the government has introduced measures in the budget 2016-17. Mr Dar expects these steps to consolidate the economic gains achieved so far towards macroeconomic stability and work towards higher growth and jobs creation.
“We met all of the end-March 2016 Quantitative Performance Criteria including those on central bank’s net domestic assets, net international reserves, and foreign currency swap/forward position by significant margins,” said a finance ministry statement.
It added the quantitative performance criteria on government borrowing from the SBP and budget deficit for end-March 2016 were over performed underlining government’s commitment to sustained fiscal consolidation.
Likewise, the indicative targets on targeted cash transfers through Benazir Income Support Programme (BISP) and power sector arrears were also met. The Federal Board of Revenue (FBR) had not only achieved its third quarter target of Rs715bn but exceeded it, thus wiping out almost the entire shortfall recorded in the FBR collection for the first quarter.
For the first time in many years, Pakistan has not changed its FBR revenue target and was on course to achieve it, the finance minister said.
Mr Dar said the external sector was stable on the back of continued growth in remittances, continued flows from international financial institutions, stable exchange rate and low oil prices, which helped contain the current account deficit.
The two sides would meet again in August for discussions on 12th last review under the $6.4bn extended fund facility (EFF) programme.