Pakistan Secures 700 Million Dollars Loan Installment From The IMF
Pakistan has successfully obtained a $700 million tranche of the loan from the International Monetary Fund (IMF) as part of the nine-month Stand-By Arrangement (SBA). This disbursement follows the recent completion of the first review of Pakistan’s economic reform program supported by the SBA by the Executive Board of the IMF. The decision of the Board allows for the immediate release of approximately $700 million, bringing the total disbursements under the arrangement to around $1.9 billion.
The 9-month SBA for Pakistan was initially approved on July 12, 2023, with an amount of $3 billion, serving as a policy anchor to address domestic and external balances. The program also establishes a framework for financial support from various multilateral and bilateral partners. The key focus areas of the program include implementing the FY24 budget to facilitate necessary fiscal adjustments, ensuring debt sustainability, protecting essential social spending, restoring a market-determined exchange rate, enhancing foreign exchange market functioning, implementing an appropriately tight monetary policy for disinflation, and making further progress on structural reforms, particularly in the energy sector, state-owned enterprise governance, and climate resilience.
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The Deputy Managing Director and Chair, Antoinette Sayeh, emphasized the significant progress made by Pakistan in stabilizing its economy following substantial shocks in FY2022-23. The program has contributed to tentative signs of increased economic activity and a reduction in external pressures. The continued strong ownership of the reform agenda by Pakistan is deemed critical to maintaining the current momentum and solidifying the stabilization of the country’s economy.
The disbursement of the IMF loan tranche underscores the importance of adhering to the economic reform measures outlined in the program, emphasizing fiscal responsibility, exchange rate stability, monetary policy effectiveness, and continued progress on structural reforms. The IMF support aims to help Pakistan navigate economic challenges and create a foundation for sustained economic growth and stability.