The International Monetary Fund (IMF) has deposited $1.2 billion into the State Bank of Pakistan’s (SBP) account, bolstering the cash-strapped country’s hopes for economic stability after it teetered on the verge of default for several months.
The IMF’s executive board authorized a $3 billion Stand-By Agreement (SBA) under a nine-month plan late last night, capping up eight months of difficult negotiations over budgetary discipline.
Pakistan achieved a staff-level agreement with the lender last month, gaining a short-term arrangement that resulted in more funding than planned for the crisis-hit country of 230 million people.
Finance Minister Ishaq Dar said in a televised address from Islamabad that Pakistan would receive the remainder cash after two reviews, the second in November and the third in February.
This inflow will boost Pakistan’s foreign exchange reserves, he added, noting that the central bank’s reserves had increased by roughly $4.2 billion in the last week.
“Our foreign exchange reserves will close at around $13-$14 billion on July 14 […] and the SBP will release the exact numbers later on,” the finance minister added, thanking Prime Minister Shehbaz Sharif for his efforts in obtaining the plan.
As the prime minister constantly communicated with the IMF’s president in Paris and during phone calls, he played a vital role in pushing the lender to agree to the new programme.
The IMF stated in a statement that its executive board approved the nine-month standby arrangement in order “to support the authorities’ economic stabilisation programme.”
“Pakistan is on the road to development […] we must all make efforts to make gains through this,” Dar remarked.
