19 June 2004	Saturday	30 Rabi-us-Saani 1425

ISLAMABAD, June 18: The US government will write off $500 million debt out of the remaining $2 billion debt owed by Pakistan, said a senior official of the ministry of finance.

He told Dawn on Friday that an agreement to this effect would be signed here next week by United States' Ambassador to Pakistan Nancy Powell and Secretary Economic Affairs Division (EAD) Dr Waqar Masood Khan.

The official said that the US government had earlier written off $1 billion debt owed by Islamabad. After writing off $500 million debt, he said, talks would be held between senior officials of the two countries to decide about the remaining $1.5 billion debt that Pakistan owed to the United States.

He also said that the IMF Executive Board would meet in Washington on June 23 to approve the second tranche of $240 million for Pakistan, out of $1.4 billion Poverty Reduction Growth Facility (PRGF) programme.

"Then the very next day (June 24) this amount will be disbursed to State Bank of Pakistan." Responding to a question, he said that the last tranche of an equal amount of ($240 million) would be disbursed in November this year to Pakistan after which the IMF programme would come to an end.

He said he had held detailed talks with IMF delegation headed by Milan Zevadjil early this week and formally informed him that Pakistan would no more be seeking new IMF funding programme. But he said that annual level consultations with the Fund would continue in future.

However, he said, development loans on low interest rate would continue to be sought from the World Bank, the Asian Development Bank (ADB) and the Islamic Development Bank (IDB). The official said that Pakistan had met the IMF "performance criteria" to secure the second last tranche of the three-year programme.