In a significant development, the International Monetary Fund (IMF) successfully concluded its first review of Pakistan’s economic reform programme on Thursday.
This programme, backed by a $3 billion and-by a arrangement (SBA), has now received a boost with the immediate approval and disbursement of $700 million, as confirmed by the finance ministry.
According to an official statement from the ministry, the completion of the first review by the IMF’s Executive Board, coupled with the payment of $528 million in special drawing rights, has elevated the total disbursements under the SBA to $1.9 billion.
The infusion of funds from the IMF, combined with recent inflows from multilateral lenders, is anticipated to contribute to the stability of the Pakistani rupee, which has demonstrated relative steadiness over the past few months.
The finance ministry highlighted that this fresh tranche would play a crucial role in facilitating rollovers from allied countries, including the United Arab Emirates, China, and Saudi Arabia.
Additionally, it is expected to alleviate external debt repayment pressures faced by Pakistan.
This positive development traces back to June 2023, when the IMF Executive Board granted approval for a much-needed nine-month arrangement with Pakistan to support its economic stabilisation program.
The initial disbursement of $1.2 billion was promptly released in July, with the remainder subject to two quarterly reviews over the programme’s duration.
The current IMF programme is slated to conclude in the second week of April, with the recent disbursement marking a significant step towards its successful execution.
Notably, a staff-level agreement was reached in November 2023 between the IMF staff and Pakistani authorities, paving the way for the first review under Pakistan’s SBA.
This agreement was contingent upon subsequent approval by the IMF’s Executive Board.
Looking ahead, Pakistan is poised to receive the remaining amount in March under the $3 billion SBA.
Despite facing challenging conditions, particularly persistently high inflation, which rose to 29.7 per cent in December from 29.2 per cent in the preceding month, Pakistan remains committed to navigating through these economic challenges with the assistance of international financial institutions.
