ISLAMABAD, Jan 19: The State Bank of Pakistan will shortly ask the commercial banks to offer medium-term dollar financing for the import of machinery.

This was agreed at a meeting between the government team, led by the adviser to the prime minister on economic affairs, Shaukat Aziz, and the head of the visiting IMF mission George T. Abed, at the finance ministry here on Sunday.

Official sources told Dawn that during the three-hour meeting it was decided that the commercial banks which possess about $3 billion could do financing for the import of machinery, specially textile machinery.

The SBP Governor, Dr Ishrat Hussain, who was present at the meeting, is likely to announce the new dollar financing policy shortly.

The IMF mission, the sources said, was informed by the government’s finance managers that a debt coordination office had been set up at the finance ministry under the chairmanship of Dr Ashfaque Hassan Khan. The office would strive to repay the less expensive debt, specially those relating to the IMF and foreign commercial banks.

Mr Abed, who is director Middle Eastern Department at the Fund, said the IMF would welcome this policy as it would further boost the confidence of the lending agencies.

Mr Aziz told the mission that all of the most expensive commercial debt had been repaid during the last three years, the sources said.

The IMF mission called for adhering to fiscal discipline. In this regard, the sources said, Mr Abed particularly stressed the need for improving financial health of major utilities, Wapda and KESC.

He said the government’s overall structural reforms agenda needed to be continued for achieving macro-economic stability. “The moment you go off the track the benefits of the reforms can be lost,” Mr Abed was quoted as saying.

The mission head said he was encouraged by the statement of Prime Minister Zafarullah Jamali about the continuity of the reforms.

The sources said Shaukat Aziz also assured the mission that the Central Board of Revenue would be completely restructured by June 30 this year.

The mission called for allocating more funds for development, specially after the enhanced financing offered by the World Bank, the IMF, the US, the European Union and Japan.

The mission was assured that the current year’s Rs134 billion Public Sector Development Programme would be enhanced in the next budget.