Pakistan receives final installment of $1.1bn from IMF

KARACHI: Pakistan received the eagerly awaited final installment of $1.1 billion from the International Monetary Fund (IMF) on Tuesday, marking the completion of the $3 billion standby arrangement, as confirmed by the State Bank of Pakistan (SBP).

According to the SBP, they received Special Drawing Rights (SDR) 828 million, equivalent to $1.1 billion, following the successful conclusion of the second review by the IMF Executive Board under the Stand By Arrangement (SBA).

The central bank stated that this disbursement would be reflected in its reserves for the week ending on May 3, 2024.

The IMF’s Executive Board completed the second review under the Stand-By Arrangement (SBA) for Pakistan the day before, bringing the total disbursements under the arrangement to approximately $3 billion.

The IMF acknowledged the Pakistani authorities’ stronger policy efforts under the SBA, which have contributed to stabilizing the economy and achieving modest growth. However, the IMF emphasized that for Pakistan to transition from stabilization to a robust and sustainable recovery, the authorities must maintain their policy and reform efforts, including strict adherence to fiscal targets.

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Pakistan is currently seeking a new, larger IMF loan over at least three years to support macroeconomic stability and implement much-needed structural reforms.

Finance Minister Muhammad Aurangzeb has indicated that Islamabad could reach a staff-level agreement on the new program by early July. However, details regarding the size of the program have not been disclosed. If secured, it would mark Pakistan’s 24th IMF bailout.

These developments follow Prime Minister Shehbaz Sharif’s meeting with IMF Managing Director Kristalina Georgieva, during which he reiterated his government’s commitment to revitalize Pakistan’s economy.

Prime Minister Sharif emphasized the importance of structural reforms, fiscal discipline, and prudent policies to ensure macroeconomic stability and sustained economic growth.

He expressed gratitude to Georgieva for the IMF’s support in securing the $3 billion Standby Arrangement (SBA) last year, which is now nearing completion.