Minister for Finance and Revenue, Senator Mohammad Ishaq Dar on Wednesday said that International Monetary Fund (IMF) Executive Board has approved the Stand-by Agreement (SBA) for US$ 3 billion for Pakistan.
“IMF Executive Board approved has Stand-by Agreement (SBA) for US$ 3 billion for Pakistan!,” he tweeted. Islamabad signed a short-term IMF deal on June 30 under which the country will receive $3 billion over nine months, subject to approval by the IMF’s board. The Executive Board’s approval allows for an immediate disbursement of SDR894 million (or about US$1.2 billion), the IMF said in the statement today. The remaining amount will be phased over the programme’s duration, subject to two quarterly reviews, it added. The IMF said the SBA was signed at a “challenging economic juncture for Pakistan”. “A difficult external environment, devastating floods, and policy missteps have led to large fiscal and external deficits, rising inflation, and eroded reserve buffers in FY23,” it added. Pakistan’s new SBA-supported programme, the IMF said will provide a policy anchor for addressing domestic and external imbalances and a framework for financial support from multilateral and bilateral partners.
Following months of delays, Pakistan secured the bailout package after taking tough economic measures including increasing interest rates and raising taxes to meet IMF conditions. After the IMF staff-level agreement, Fitch credit rating agency Monday – after almost a year – upgraded Pakistan’s long-term foreign currency issuer default rating to CCC from CCC-.
Pakistan has $25 billion of debt repayments due in the fiscal year starting July, according to Moody’s Investors Service. That’s more than five times its foreign-exchange reserves, which stood at $4.5 billion at the end of June. The IMF deal will unlock billions of dollars from nations and other multilateral lenders. Meanwhile, Prime Minister Shehbaz Sharif on Wednesday said that the approval of the International Monetary Fund’s (IMF) executive board for a Stand-by Agreement of $3 billion, a little while ago, was a major step forward in the government’s efforts to stabilise the economy and achieve macroeconomic stability.
On his Twitter handle, the prime minister said that the agreement would bolster Pakistan’s economic position to overcome immediate- to medium-term economic challenges, giving next government the fiscal space to chart the way forward. He further said that this milestone, which was achieved against the heaviest of odds and against seemingly impossible deadline, could not have been possible without excellent team effort. The prime minister commended Finance Minister Ishaq Dar and his team at the ministry of finance for their hard work. He also conveyed his special thanks to Managing Director IMF Kristalina Georgieva and her team for their support and cooperation.
