IMF has passed a second last loan of $6.2billion for china Pakistan economic corridor (CPEC). They have given time and relaxation for the central bank to borrow more for the project. They have given this relaxation after reviewing the economic status of Pakistan in 2015.
The loan was given in 2013 for Islamabad to repay its earlier loan, in September 2013 and Pakistan still has to go 2 reviews to complete. IMF said Pakistan has fulfilled all the requirement of 2015 and 2016. They have done pretty well in the first half and have increased the net international reserves of state bank of Pakistan to $9.3 billion.
The IMF board has accepted Pakistan’s request on modification of quantitative performance criteria of net foreign currency swap. For the recent year IMF has imposed ceiling on foreign currency swap and forward positions at $1.6 billon.
The swap arrangements have shown that SBP has borrowed dollars for certain obligation from central bank but IMF is not in favor because it will decrease the amount of dollar reserves.
The negotiation between Pakistan and IMF for the new 11th review from 2nd may to 11th may will be locked and it will be the second last review that will release the last remaining loan trenche.