ISLAMABAD – All eyes are on the International Monetary Fund (IMF) as the lender’s Executive Board is set to officially approve a $7 billion Extended Fund Facility (EFF) for Pakistan.
Islamabad is optimistic about securing the funds and has taken significant steps to achieve this, including obtaining funding commitments from friendly nations. The prime minister, finance minister, and cabinet members have expressed confidence ahead of the review. Delays were attributed to the need for debt rollover confirmations from China, Saudi Arabia, and the UAE.
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The ruling coalition has implemented structural reforms and highlighted recent declines in KIBOR and policy rates, assuring that any borrowing will be on favorable terms for the government.
Two months ago, Islamabad secured a three-year EFF agreement with the IMF aimed at achieving macroeconomic stability and inclusive growth. This follows the completion of a prior $3 billion loan program in April, with Pakistan receiving credit rating upgrades from Moody’s and Fitch Ratings last month.
IMF spokesperson Julie Kozack recently confirmed the impending approval, emphasizing its importance for Pakistan, which has been facing rising inflation and declining foreign reserves. The loan package has been under discussion since May, with a staff-level agreement reached in July.
The IMF funding will also unlock additional financial support from other international partners, offering crucial relief to Pakistan’s $350 billion economy. Finance Minister Muhammad Aurangzeb confirmed that all matters with the IMF have been resolved, expressing gratitude to the negotiating teams involved.
