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IMF names new head in Pakistan
Mission likely to arrive in next two months
Saturday, August 16, 2008
By Mehtab Haider
ISLAMABAD: The International Monetary Fund (IMF) has nominated Paul Ross as the new head of its mission in Pakistan after Dominique Guillaume refused to become resident head owing to unknown personal reasons. The new resident head is likely to assume charge next month (September 2008).
Due to increasing external vulnerabilities in the shape of balance of payment (BoP) difficulties being faced by the economy, the IMF is gaining its lost importance as Pakistan said goodbye to the Fund after completion of its last programme, the Poverty Reduction and Growth Facility (PRGF) a few years ago.
Sources said that the IMF had nominated Dominique Guillaume as resident head after Henri Lorie, but he refused to take charge after visiting Islamabad, citing personal reasons. Now the IMFs management has nominated Paul Ross, who is likely to assume charge by September.
Although Pakistan is not under the IMF programme, the Fund holds consultation process with all member states and a mission is likely to visit Islamabad by the end of September or early October to get first hand knowledge about the countrys economy.
Another technical level mission of the IMF is scheduled to visit Pakistan from September 9 to 14, which will hold talks with FBR authorities and other concerned ministries, an official source said.
Owing to the growing fiscal and external imbalances, high officials of IMF have again started roaming around economic ministries, sparking fears that Pakistan may approach the Fund in order to remove its BoP problems by the end of fiscal year 2008-09.
Swift depreciation of the rupee against the dollar and rapidly depleting foreign currency reserves give clear indications that the government desperately requires dollar inflows to keep its reserves at comfortable levels. Otherwise, it will have to approach the IMF to remove its BoP woes.
The rupee has touched Rs76.35 against the dollar while reserves stand at $9.66 billion, including around $3 billion held by commercial banks. Forward liabilities of the central bank are hovering around $1.5 billion. Hence, the reserves position is quite dismal, which is actually touching $4 to $4.5 billion, a level which can meet the import bill for only one month.
In case dollar inflows do not come in one month period to rescue dwindling reserves, there will be no other option but to approach the IMF for a bailout package, said sources. Pakistan is also striving hard to get Saudi Oil Facility (SOF) worth $5 billion, as Islamabad estimates to import oil worth $14 billion during the current fiscal year.
The IMF team held extensive talks with high-ups of newly elected government before the announcement of the Budget 2008-09.
The IMF and World Bank (WB) projected the GDP growth target hovering around 3.5 per cent for fiscal year 2008-09 against Islamabads projected target of 5.5 per cent.
Multilateral creditors including IMF, WB and ADB are closely watching Pakistan related to the commitments made by the incumbent regime in terms of reducing the fiscal deficit and narrowing down trade deficit in order to overcome the yawning current account deficit in fiscal year 2008-09.
Mission likely to arrive in next two months
Saturday, August 16, 2008
By Mehtab Haider
ISLAMABAD: The International Monetary Fund (IMF) has nominated Paul Ross as the new head of its mission in Pakistan after Dominique Guillaume refused to become resident head owing to unknown personal reasons. The new resident head is likely to assume charge next month (September 2008).
Due to increasing external vulnerabilities in the shape of balance of payment (BoP) difficulties being faced by the economy, the IMF is gaining its lost importance as Pakistan said goodbye to the Fund after completion of its last programme, the Poverty Reduction and Growth Facility (PRGF) a few years ago.
Sources said that the IMF had nominated Dominique Guillaume as resident head after Henri Lorie, but he refused to take charge after visiting Islamabad, citing personal reasons. Now the IMFs management has nominated Paul Ross, who is likely to assume charge by September.
Although Pakistan is not under the IMF programme, the Fund holds consultation process with all member states and a mission is likely to visit Islamabad by the end of September or early October to get first hand knowledge about the countrys economy.
Another technical level mission of the IMF is scheduled to visit Pakistan from September 9 to 14, which will hold talks with FBR authorities and other concerned ministries, an official source said.
Owing to the growing fiscal and external imbalances, high officials of IMF have again started roaming around economic ministries, sparking fears that Pakistan may approach the Fund in order to remove its BoP problems by the end of fiscal year 2008-09.
Swift depreciation of the rupee against the dollar and rapidly depleting foreign currency reserves give clear indications that the government desperately requires dollar inflows to keep its reserves at comfortable levels. Otherwise, it will have to approach the IMF to remove its BoP woes.
The rupee has touched Rs76.35 against the dollar while reserves stand at $9.66 billion, including around $3 billion held by commercial banks. Forward liabilities of the central bank are hovering around $1.5 billion. Hence, the reserves position is quite dismal, which is actually touching $4 to $4.5 billion, a level which can meet the import bill for only one month.
In case dollar inflows do not come in one month period to rescue dwindling reserves, there will be no other option but to approach the IMF for a bailout package, said sources. Pakistan is also striving hard to get Saudi Oil Facility (SOF) worth $5 billion, as Islamabad estimates to import oil worth $14 billion during the current fiscal year.
The IMF team held extensive talks with high-ups of newly elected government before the announcement of the Budget 2008-09.
The IMF and World Bank (WB) projected the GDP growth target hovering around 3.5 per cent for fiscal year 2008-09 against Islamabads projected target of 5.5 per cent.
Multilateral creditors including IMF, WB and ADB are closely watching Pakistan related to the commitments made by the incumbent regime in terms of reducing the fiscal deficit and narrowing down trade deficit in order to overcome the yawning current account deficit in fiscal year 2008-09.
