The Executive Board of the International Monetary Fund (IMF) has greenlit $1.1 billion (equivalent to Rs 9,181 crore) in funding for Pakistan, as announced by the agency in a recent statement. This funding marks the second and final tranche of a $3 billion standby arrangement that Islamabad secured last summer to stave off a sovereign default.
The approval follows discussions between Pakistan Prime Minister Shehbaz Sharif and IMF Managing Director Kristalina Georgieva on the sidelines of the World Economic Forum in Riyadh. Talks centered around a new, potentially larger long-term Extended Fund Facility (EFF) agreement with the IMF as the current standby arrangement is set to expire this month.
Pakistan’s Finance Minister, Muhammad Aurangzeb, anticipates a staff-level agreement on the new program to be reached by early July. Islamabad aims to secure a loan spanning at least three years to address macroeconomic stability and implement crucial structural reforms, although specifics regarding the loan amount remain undisclosed.
While a formal request is pending, ongoing discussions between the Fund and the Pakistani government are underway. If finalized, this would mark Pakistan’s 24th IMF bailout.
The Pakistani economy, valued at $350 billion, grapples with a persistent balance of payments crisis, compounded by the obligation to repay nearly $24 billion in debt and interest over the next fiscal year—a sum exceeding three times the nation’s central bank’s foreign currency reserves.
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