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Pakistan Prepares For IMF’s Second Review

Pakistan Prepares For IMF's Second Review

The Pakistani finance ministry declared on Wednesday that the second and final evaluation of a Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) is set to occur in Islamabad from March 14 to 18.

Last summer, Islamabad obtained an eleventh-hour bailout from the IMF to avert a sovereign default. The successful conclusion of the final evaluation is projected to trigger the release of an approximately $1.1 billion tranche.

Read more: IMF Delegation Coming To Pakistan For Bailout Assessment

As per a statement from the finance ministry, Pakistan has met all requirements including Structural Benchmarks, Qualitative Performance Criteria, and Indicative Targets stipulated for the IMF evaluation. The ministry expects to achieve a staff-level agreement subsequent to this assessment, marking the culmination of the SBA.

Upon endorsement by the Executive Board of the IMF, the ultimate tranche of $1.1 billion will be dispersed.

Prime Minister Shehbaz Sharif has directed his finance team, headed by newly appointed Finance Minister Muhammad Aurangzeb, to initiate preparations for seeking an Extended Fund Facility (EFF) following the termination of the existing standby arrangement on April 11. The IMF has expressed willingness to devise a medium-term program upon Pakistan’s submission.

Prior to the preceding bailout, Pakistan implemented several measures mandated by the IMF, encompassing budget revisions, a rise in the benchmark interest rate, and escalations in electricity and natural gas tariffs. These measures led to a surge in inflation and a significant devaluation of the rupee against the USD.