IMF Board meets in Washington on 31st

To review Pakistan economy, approve $1.2bn tranche

KARACHI: The International Monetary Fund’s (IMF) Board of Directors will meet in Washington on March 31 to review Pakistan’s economy and approve the fifth tranche of $1.2 billion for the country.

A month ago, IMF and Pakistan government officials met in Dubai to take stock of the country’s economy for the quarter ended December 31, 2009, officials said. They said Pakistan met all the quantitative performance targets for end-December 2009, barring the budget deficit target, which exceeded by a small margin.

The exchange rate remained stable at Rs84-85 to a US dollar, while the foreign exchange reserves position strengthened and stayed above $14 billion, they added.

Following the approval of loan worth $1.2 billion from the IMF, the total funds released from the international financial institutions would reach around $7.54 billion from the overall rescue package of $11.2 billion.

Earlier, IMF has said that Pakistan’s monetary policy would continue to focus on price stability and building foreign exchange reserves. The global donor agency also pointed out that inflation has been more persistent than expected due to the higher administered prices and inflationary expectations.

The State Bank of Pakistan will monitor inflation and if inflationary pressures persist, monetary policy could be tightened, the Fund reportedly said. Pakistani officials say that the structural reforms are progressing in line with IMF conditions, while amendments to the State Bank of Pakistan Act have been submitted and tax administration reforms are continuing.

Among other steps, the amendments to the Banking Companies Ordinance had been approved by the National Assembly and electricity reforms also being implemented, but slower than planned, they said. Officials say that slow electricity reforms remain a drag on growth as it undermines the reliability of power supply.