IMF Executive Board all set to approve $700 million for Pakistan next week

07 January 2024

Published in: The Nation

 The International Monetary Fund (IMF) Executive Board is all set to approve $700 million for Pakistan next week, which will help in building the coun­try’s foreign exchange reserves.

The IMF’s board is scheduled to consider the first review un­der Pakistan’s current $3 billion stand-by arrangement (SBA) on January 11, 2024. According to the Executive Board’s calendar updated on the Fund’s website, the Board would take “Paki­stan – First Review under the SBA” on its agenda on January 1, 2024. The current IMF pro­gramme of $3 billion is sched­uled to end in the second week of April 2024, with around $1.8 billion remaining un-disbursed. The IMF had already released $1.2 billion as the first tranche in July. The IMF staff and the Pakistani authorities reached a staff-level agreement on No­vember 15, on the first review under Pakistan’s SBA, subject to approval by the IMF’s Executive Board. Upon approval, Pakistan will have access to SDR 528 mil­lion (around $700 million).

After the staff level agree­ment with the IMF, Pakistan had started increasing inflows from international financial institutions. In the last two weeks, the country had re­ceived $1.2 billion from in­ternational lenders. Inflows had helped in increasing the country’s foreign exchange re­serves to $13.220 billion as of 29-Dec-2023. The break-up of the foreign reserves position showed that foreign reserves held by the State Bank of Paki­stan are $8.221 billion and for­eign reserves held by commer­cial banks are $4.999 billion. The World Bank and Asian De­velopment Bank had recently announced loans for Pakistan. The World Bank’s Board of Executive Directors approved $350 million in financing for the Second Resilient Institu­tions for Sustainable Economy (RISE-II) Operation, which aims to strengthen fiscal man­agement and promote com­petitiveness for sustained and inclusive economic growth. The Asian Infrastructure In­vestment Bank had approved $250 million for the Second Resilient Institutions for Sus­tainable Economy (RISE-II) development policy financ­ing. The Asian Development Bank (ADB) had recently ap­proved three projects totaling $658.8 million to help Pakistan achieve its goal of more inclu­sive and sustainable growth and development.

Pakistan is expecting to re­ceive more inflows from inter­national financial institutions in the next couple of months as the International Monetary Fund (IMF)’s Executive Board would meet on January 11.