IMF approves $700mln loan for Pakistan

SBP reserves decrease by $66m,

Islamabad_The IMF executive board’s approval came after continued efforts of caretaker Finance Minister Shamshad Akhtar and Army Chief General Asim Munir.

The International Monetary Fund (IMF) on Thursday finished its first review of Pakistan’s economic reform programme supported by a $3 billion Stand-By Arrangement (SBA) and allowed the immediate disbursement of $700 million.

According to the finance ministry, the completion of the first review by the IMF and the payment of Rs528m in special drawing rights brought the total disbursements under the SBA to $1.9bn.

The disbursement of the tranche could provide much-needed financial support, the ministry added.
The existing IMF programme, amounting to $3bn, is said to conclude in the second week of April. The initial tranche of $1.2bn was released in July.

In November 2023, a Staff-Level Agreement was reached between the IMF staff and Pakistani authorities regarding the first review under Pakistan’s SBA. This agreement was depending upon approval by the fund.

Pakistan is expected to receive the remaining amount in March under the $3bn SBA.

Nevertheless, caretaker Finance Minister Shamshad Akhtar had already informed the nation that the country needed to enter a new agreement with the IMF for the support of the economy.

There is no hope that Pakistan could say goodbye to the lending agency. Despite tough conditions, Pakistan is still confronted with ever high inflation of 29.7 per cent for December from 29.2pc in the preceding month.Alvi approves 4 new ordinances to fulfil IMF program’s requirements

Earlier,

Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased by $66 million on a weekly basis,

Total liquid foreign reserves held by the country stood at $13.25 billion. Net foreign reserves held by commercial banks stood at $5.10 billion.

The SBP attributed the decline in the reserves to debt repayments. “During the week ended on 5-Jan-2024, SBP’s reserves decreased by US$ 66 million to US$ 8,154.8 million due to debt repayments,” it said.