IMF Executive Board to review final approval of Pakistan’s $7bn SBA on Sept 25

The International Monetary Fund (IMF) has placed Pakistan on the agenda for its Executive Board meeting scheduled for September 25, 2024. During this meeting, the Board will review the final approval of Pakistan’s US$7 billion Stand-By Arrangement (SBA).

Sources indicate that if the Board expresses satisfaction with Pakistan’s progress, it will lead to the release of the next tranche of funds. On September 13, Finance Minister Muhammad Aurangzeb announced that all issues with the IMF had been resolved smoothly, stating, “Alhamdulillah, the Prime Minister appreciates the IMF negotiation team and related institutions.” He emphasized that the economy is now moving from stabilization to growth.

The minister mentioned that the agreement will be finalized at the IMF’s upcoming Board meeting and noted that a reduction in the policy rate will boost investment, business activity, and job creation.

IMF’s Communication Director, Julie Kozek, confirmed the September 25 meeting in a press briefing, stating that negotiations for the $7 billion loan program were completed in July. On July 13, Pakistan and the IMF reached a three-year agreement for a $7 billion aid package, which now awaits the IMF Board’s approval.

According to the IMF, this program aims to solidify Pakistan’s macroeconomic stability and create conditions for more robust, inclusive, and sustainable growth. The Fund’s mission chief to Pakistan, Nathan Porter, stated that the program would build on recent macroeconomic achievements by improving public finances, reducing inflation, restoring external reserves, and removing economic distortions to promote private-sector-led growth.