Karachi, November 22, 2012 (PPI-OT): Pakistan has made the seventh installment worth of USD 394 million of IMF’s Stand-By Arrangement (SBA) on November 21, 2012.
According to Alfalah Securities Limited, the repayment would lead to decline in foreign exchange reserves which in turn is likely to put pressure on Pak Rupee parity leading to steeper devaluation of the local currency. The massive repayments ahead are likely to add to the economic woes of the country resulting in heating up imported inflation arising out of steep devaluation of currency and raising concerns of funding the widened trade and current account deficits.
Moreover, the government is considering taking up further IMF loan to meet the heavy burden of foreign obligation including that of IMF-SBA loan repayments. A Strategic Dialogue meeting is scheduled to be held on November 29 and 30 in Washington, wherein the issues related to IMF funding would be discussed. A new loan from IMF would ease of the burden of heavy payments that are likely to erode a significant chunk of Alfalah Securities Limited’s foreign exchange reserves in FY13. However, the new loan would also bring in new stiff economic measures like new taxes that would add to the troubles of the local masses.