IMF says Pakistan set to receive $700 million after review success
The International Monetary Fund (IMF) announced on Wednesday that it had reached a significant milestone with Pakistan—a staff-level agreement on the initial review of a 3 billion US dollar bailout package. This achievement paves the way for the disbursement of 700 million dollar in funding to support the country's economic measures.
Prior to securing the bailout in July, Pakistan was required to implement a series of measures outlined by the IMF. These included revising its budget, increasing its policy rate, and raising prices for electricity and natural gas.
The $700 million slated for release constitutes the second tranche of the bailout, pending approval from the IMF's executive board.
Nathan Porter, the head of the IMF's mission in Pakistan, highlighted, "Once approved, around $700 million (SDR 528 million) will be made available, bringing the total disbursements under the program to nearly $1.9 billion."
The IMF delegation led by Porter, engaged in technical and policy discussions during a two-week visit to Pakistan, concluded their assessment on Wednesday. The focus was on evaluating Pakistan's progress in meeting the stipulated benchmarks set forth in the standby arrangement agreed upon in July. The initial tranche of $1.2 billion was promptly disbursed to assist the South Asian economy in avoiding a potential sovereign debt default.
Pakistan had been grappling with a severe balance of payment crisis, as its foreign exchange reserves had depleted to a level barely sustaining three weeks' worth of controlled imports. The country also faced historically high inflation rates and an unprecedented devaluation of its currency.
This recent agreement signifies a positive step forward for Pakistan's economic recovery as it strives to stabilize its financial footing amidst challenging circumstances.