03 December 2004	Friday	20 Shawwal 1425

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WASHINGTON, Dec 2: Pakistan exits the International Monetary Fund programme as the fund's board of directors complete the ninth and final review of the country's three-year poverty reduction programme , allowing it to forgo the final tranche of $262 million.

Pakistan will not seek a successor arrangement once the current Poverty Reduction and Growth Facility expires in December 2004, says an IMF document.

The fund's executive board also approved Pakistan's request for waivers for non-observance of three structural performance criteria and also of a continuous performance criterion against the imposition or intensification of exchange restrictions.

Total disbursements under the PRGF arrangement approved on Dec 6, 2001 amounted to $1.31 billion. Agustín Carstens, Deputy Managing-Director and Acting Chair, said: "Pakistan ... has made a strong recovery from the economic crisis of the late 1990s."

Tighter macroeconomic policies and structural reforms, he said, have resulted in a stronger external position, a lower public debt burden, renewed access to international capital markets, and a revival in growth. Lately, however, there had been some increase in inflation, he added.

"External support has played a part in Pakistan's recovery, but the turnaround has been primarily due to the implementation of strongly owned government policies."

Commending Pakistan on the successful completion of its arrangement under the PRGF, the executive board welcomed its decision not to draw the final tranche. They also noted that Pakistan would now rely on domestic and international capital markets to meet its financing needs.

The International Monetary Fund directors, however, said that the fund would maintain a dialogue with Pakistan on economic and financial developments and policies in the context of the IMF's normal consultations with member countries.