The IMF board approved a $1.1 billion loan tranche for Pakistan, marking the completion of the second bailout package. The funding is the third and final tranche of a $3 billion standby arrangement to avert a sovereign default. Pakistan is aiming for a new, larger IMF loan to support macroeconomic stability and structural reforms.
ISLAMABAD: The executive board of the International Monetary Fund (IMF) on Monday approved $1.1 billion loan tranche for Pakistan, marking the end of the second bailout package, ARY News reported citing sources.
The funding is the third and last tranche of a $3 billion standby arrangement with the global lender, which it secured last year to avert a sovereign default and which runs out this month.
The final tranche was approved after the IMF Executive Board meeting in Washington today that discussed Pakistan’s request for the release of funds.
Insiders told ARY News that Pakistan is likely to receive the loan payment tomorrow, with IMF greenlighting the disbursement after approval.
Last month, the International Monetary Fund (IMF) reached a staff-level agreement with Pakistan on the final review of a $3 billion bailout package.
So far, the country has received two tranches of $1.2 billion in July and $700 million in January 2024, totaling $1.9 billion.
Pakistan is seeking a new long-term and larger IMF loan, with Finance Minister Muhammad Aurangzeb saying Islamabad could secure a staff-level agreement on the new program by early July.
Islamabad says it is seeking a loan over at least three years to help macroeconomic stability and execute a long-due and painful structural reforms, though Aurangzeb has declined to detail what seize of programme the country seeks. If secured, it would be the 24th IMF bailout for Pakistan.
The development came a day after Prime Minister Shehbaz Sharif’s meeting with IMF MD Kristalina Georgieva wherein he reiterated his government’s commitment to put Pakistan’s economy back on track.
In the meeting held on the sidelines of the World Economic Forum Special Meeting here, the prime minister said that he had directed his financial team, led by Finance Minister Muhammad Aurangzeb to carry out structural reforms, ensure strict fiscal discipline and pursue prudent policies that would ensure macro-economic stability and sustained economic growth.
He thanked Georgieva for supporting Pakistan in securing the $3 billion Standby Arrangement (SBA) from the IMF last year that was about to be completed.
We are pleased to announce that the International Monetary Fund (IMF) has approved a $1.1 billion loan tranche for Pakistan. This decision demonstrates the IMF’s continued support and confidence in Pakistan’s economic reform program. The approval of this tranche reflects the progress made by Pakistan in implementing important structural reforms to strengthen its economy and pave the way for sustained growth. The funding from the IMF will play a crucial role in bolstering Pakistan’s efforts to address balance of payments and fiscal challenges, while contributing to macroeconomic stability and resilience. It will also support the government’s initiatives aimed at boosting investment, employment, and social development. This significant development marks a positive step forward in Pakistan’s journey toward economic stability and prosperity. The IMF’s decision underscores the importance of continued commitment to reform and responsible economic management. We look forward to witnessing the positive impact of this loan tranche on Pakistan’s economy and the well-being of its people.
Source: ARY NEWS
The IMF board has approved a $1.1 billion loan tranche for Pakistan, marking the end of the second bailout package. This funding is the third and final tranche of a $3 billion standby arrangement and comes after the IMF’s executive board meeting in Washington. Pakistan is set to receive the loan payment soon, as the IMF greenlights the disbursement. The country is also seeking a new long-term and larger IMF loan, emphasizing the need for macroeconomic stability and structural reforms. Prime Minister Shehbaz Sharif has reiterated the government’s commitment to putting Pakistan’s economy back on track in a meeting with IMF MD Kristalina Georgieva.
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