ISLAMABAD – Pakistan has received a loan tranche of $700 million from the International Monetary Fund (IMF) under the nine-month Stand-By Arrangement (SBA).
The development comes days after the Executive Board of the IMF completed the first review of Pakistan’s economic reform programme supported by the SBA. The Board’s decision allowed for an immediate disbursement of around $700 million, bringing total disbursements under the arrangement to about $1.9 billion.
Pakistan’s 9-month SBA was approved by the Executive Board on July 12, 2023, in the amount of $3 billion at the time of approval, aims to provide a policy anchor for addressing domestic and external balances and a framework for financial support from multilateral and bilateral partners.
The programme is “focused on (1) implementation of the FY24 budget to facilitate Pakistan’s needed fiscal adjustment and ensure debt sustainability, while protecting critical social spending; (2) a return to a market-determined exchange rate and proper FX market functioning to absorb external shocks and eliminate FX shortages; (3) an appropriately tight monetary policy aimed at disinflation; and (4) further progress on structural reforms, particularly with regard to energy sector viability, SOE governance, and climate resilience,” read the official statement issued on January 11 this year.
Deputy Managing Director and Chair Antoinette Sayeh had said, “Pakistan’s program performance under the Stand-By Arrangement has supported significant progress in stabilizing the economy following significant shocks in FY2022-23. There are now tentative signs of activity picking-up and external pressures easing. Continued strong ownership remains critical to ensure the current momentum continues and stabilization of Pakistan’s economy becomes entrenched”.
