IMF, Pakistan made crucial progress after $3bln loan last month
2 Min Read
Pakistan completed a short-term $3 billion program last month, staving off a sovereign debt default.
-
An Afghan boy sits over his family's belongings retrieved from their damaged mud homes demolished by authorities on the outskirts of Islamabad, Pakistan, on November 1, 2023. (AP)
The International Monetary Fund mission confirmed that Pakistan and itself have progressed significantly to reach a staff-level agreement for an extended fund facility.
This comes after Pakistan completed a short-term $3 billion program last month, staving off a sovereign debt default.
Following a second review of Pakistan's compliance with the economic stabilization program under the Stand-By Arrangement (SBA), the IMF agreed to issue a new $1.1 billion package to Pakistan in March.
In July 2023, the IMF approved a nine-month SBA for $3 billion to support the country's economic stabilization program, with a disbursement of $1.2 billion.
In November, the IMF and Pakistani authorities agreed on the first review for the SBA, followed by the IMF disbursing $700 million, which strengthened the foreign exchange reserves of the Pakistani central bank.
Read next: Global solidarity seminar: Islamabad journalists stand with Gaza
The head of the IMF team in Pakistan, Nathan Porter, was quoted as saying in a statement, "​The IMF team has reached a staff-level agreement with the Pakistani authorities on the second and final review of Pakistan’s stabilization program supported by the IMF’s US$3 billion ... This agreement is subject to approval by the IMF’s Executive Board, upon which the remaining access under the SBA, US$1.1 billion (SDR [Special Drawing Rights] 828 million), will become available."
The country's economy has been exacerbated by skyrocketing inflation, political instability, the global energy crisis, earthquakes, and the devastating floods that submerged large portions of the country in 2022.
The country's balance of payments crisis is one of Pakistan's largest problems, causing major instability in the local currency's rate.
Islamabad earlier opposed abiding by the IMF's strict requirements on raising taxes and slashing subsidies.
