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IMF to approve Pakistan tranche in April: official

world Updated: Mar 29, 2010 11:56 IST
International Monetary Fund

The International Monetary Fund (IMF) is likely to meet by mid-April to approve the fifth tranche of a loan to Pakistan and a delay was purely for "bureaucratic" reasons, a government official said on Monday.

Pakistan turned to the IMF for an emergency loan package of USD 7.6 billion in November 2008 to help avert a balance of payments crisis and shore up reserves.

The IMF increased the loan to USD 11.3 billion in July and the central bank received the fourth tranche on Dec. 28.

The IMF was originally scheduled to meet on March 24 to approve the fifth tranche but the meeting was postponed to March 31, and then delayed again, sparking speculation in the Pakistani media that the programme was in jeopardy.

But a senior government official said the delay was only because of the late submission of a value-added tax (VAT) law in provincial assemblies.

The IMF required Pakistan to submit the VAT law to parliament by the end of December 2009. VAT on services is a provincial issue and so requires approval of the country's four provincial assemblies.

Asif Bajwa, special secretary at the Ministry of Finance, said the provincial assemblies had just completed the process, and the IMF had been informed.

"They know that it has been done. It has been confirmed by telephone and the documentation is being sent to them," Bajwa told Reuters.

"The IMF needs 10 days to circulate the papers and that is why they said that they will delay the meeting," said Bajwa.

"The reasons are only bureaucratic and this is not a big issue."

The IMF meeting was likely to be held by the middle of April, though no new date had been set, he said.