The State Bank of Pakistan (SBP) Governor, Jameel Ahmed, announced on Wednesday that Pakistan has received $700 million from the International Monetary Fund (IMF) as part of its ongoing bailout program.
The approval for the loan came after the IMF Executive Board successfully completed its first review last week, marking a substantial step in the disbursement of funds under the $3 billion Standby Arrangement (SBA).
With this recent disbursement, the total funds received by Pakistan under the SBA now stand at approximately $1.9 billion, further aiding the country’s economic recovery efforts.
Following the approval by the International Monetary Fund (IMF) Executive Board last week, Antoinette Sayeh, Deputy Managing Director and Chair, noted positive signs of economic activity picking up and external pressures easing in Pakistan.
The nine-month Standby Arrangement (SBA), approved on July 12, serves as a policy anchor to address domestic and external balances, providing a framework for financial support from both multilateral and bilateral partners.
In order to secure the IMF bailout, Pakistan implemented challenging measures, including a revamped budget, a significant interest rate hike, and substantial increases in electricity and gas prices. The country also committed to raising $1.34 billion in new taxation to meet fiscal adjustments, contributing to a record-high inflation of 38% year-on-year in May, still persisting above 30%.
Antoinette Sayeh emphasized the importance of the authorities’ commitment to ongoing adjustments in electricity and natural gas prices, essential for sector viability and fiscal sustainability. With the IMF loan secured, analysts anticipate Pakistan to attract additional multilateral and bilateral loans.
Additionally, the State Bank of Pakistan (SBP) confirmed that the United Arab Emirates (UAE) has rolled over two $1 billion deposits, providing relief to the friendly country.
“UAE has confirmed rollover of its two deposits of US$1.0 billion each placed with State Bank of Pakistan for another one year which were maturing in January 2024,” the statement mentioned.
