ISLAMABAD - The caretaker government has no intention to approach IMF in near future despite the fact that foreign exchange reserves are sharply depleting that stand to cover just around two months worth of import bills.

The foreign exchange reserves held by the central bank stood at $6.697 billion, which is covering only two months import bill that would further decline to below $6 billion by the end of June 2013. The country’s reserves would further decline in the last quarter (April to June) of the ongoing financial year, as Pakistan would repay around $1 billion to the IMF.

According to SBP, country’s foreign exchange reserves decline to $11.758 billion wherein commercial banks held reserves are $5.061 billion and reserves held by the central bank went down to at $6.697 billion on April 5. Pakistan’s reserves deceased by $444 million in one week to $11.758 billion on April 5 from $12.202 billion on March 29.

The reserves would come down to below $6 billion at the end of June 2013 due to heavy repayment to IMF in last three months of the current financial year. However, the caretaker government is least interested in resolving the economic issues as it failed to appoint finance minister who could take courageous decision to improve the economic situation including approach IMF.

According to some reports, the Secretary Finance has proposed the prime minister engagement with the IMF with the deficit rising due to overspending relative to resources. The prime minister was informed last week that country is suffering from heavy fiscal imbalances as we are spending more than what we earn. Pakistan should remain in contact with the IMF. However sources said prime minister not decided yet in this regard.

“The prime minister can decide when to approach IMF”, said an official of the finance ministry. He admitted that Pakistan would have no other option than to approach IMF in next few months as reserves are sharply depleting owing to the repayment to the Fund. 

Pakistan has so far repaid $1.8 billion to the IMF during the current fiscal year 2012-13 and the remaining $1 billion will be paid in the last three months (April-June) period of the fiscal year 2012-13. According to the schedule of the repayments to the IMF, Pakistan would repay around $107.117 million in April 2013, $534 million in May 2013 and on June 28 of $264 million.

Total installments of outstanding loans of the IMF will stand at over $905 million, depending on the convertible rate of the Special Drawing Rights (SDRs) against the dollar. Similarly, Pakistan will have to repay $3.8 billion to the IMF in the next budget of 2013-14, starting from July 1.