In a relief to cash-strapped Pakistan, the International Monetary Fund (IMF) on Wednesday gave final approval to a “stand-by arrangement” of USD 3 billion to support the government’s efforts to stabilize the country’s battered economy. Gave it
The development came two weeks after the two sides reached a staff-level agreement on “stand-by arrangements”. “The Executive Board of the International Monetary Fund (IMF) approved a 9-month stand-by arrangement (SBA) for Pakistan amounting to SDR 2,250 million (about $3 billion, or 111 percent of the quota) to support officials Has approved the ‘Economic Stabilization Program,’ the global lender said in a statement.
The Dawn newspaper reported that the approval allows immediate disbursement of US$1.2 billion. It added, “The remaining amount will be given in a phased manner over the duration of the program, subject to two quarterly reviews.”
The global lender said the program will focus on “implementation of the FY2024 budget to facilitate Pakistan’s necessary financial adjustments and ensure debt sustainability”. The development came after Pakistan received US$2 billion from Saudi Arabia and US$1 billion from UAE as per the terms of the fund.
Pakistan is struggling to get IMF support for its ailing economy. It is believed that the new loan will improve the country’s foreign exchange reserves and will also open the door for multilateral loan agreements with institutions and countries.
Shahbaz calls it a major step in the government’s efforts to stabilize the economy
Prime Minister Shehbaz Sharif tweeted, “The approval of the US$3 billion stand-by agreement by the IMF’s Executive Board a while back is a major step in the government’s efforts to stabilize the economy and achieve macroeconomic stability.”
“It strengthens Pakistan’s economic position to overcome immediate to medium-term economic challenges, providing fiscal space for the next government to move forward,” he added.
Pakistan’s economy has been in a state of rapid decline for the past several years, putting untold pressure on the poor population in the form of rampant inflation, which has made survival almost impossible for a large number of people.
Pakistan was struggling to arrange enough foreign exchange to satisfy the IMF, which refused to give the remaining US$2.5 billion out of a US$6.5 billion loan program that was signed in 2019 And this year ended on 30th June.
(With inputs from PTI)