The approval for the loan comes after the completion of the first review by the IMF Executive Board last week.
KARACHI: (UrduPoint/Pakistan Point News-Jan 17th, 2024) Pakistan on Wednesday successfully obtained $700 million from the International Monetary Fund (IMF) under its bailout program, according to State Bank of Pakistan (SBP) Governor Jameel Ahmed's announcement on Wednesday.
The central bank made it confirmation through its X account.
Taking to X, the SBP said, “1/2 #SBP has received SDR 528 million (equivalent to $705.6 million) in value 16th January 2024 from IMF following successful completion of the first review by the Executive Board of IMF under Stand By Arrangement (SBA),”
In another Tweet, the SBP said, “UAE has confirmed rollover of its two deposits of US$1.0 billion each placed with State Bank of Pakistan for another one year which were maturing in January 2024. #SBP,”.
The approval for the loan came after the completion of the first review by the IMF Executive Board last week. This disbursement contributes to the overall funds received, reaching approximately $1.9 billion under the $3 billion Standby Arrangement (SBA).
Following the board's endorsement, Antoinette Sayeh, Deputy Managing Director and Chair, expressed optimism, stating, "There are now tentative signs of activity picking up and external pressures easing."
The Executive Board approved the nine-month SBA on July 12 last month, aiming to provide a policy anchor to address both domestic and external balances, along with a framework for financial support from various multilateral and bilateral partners.
Pakistan, in compliance with IMF requirements, implemented stringent measures, including a revised budget, a significant interest rate hike, and substantial increases in electricity and gas prices, to secure the bailout. As part of the agreement, Pakistan also raised $1.34 billion in new taxation to meet fiscal adjustments. However, these measures led to an all-time high inflation rate of 38% year-on-year in May, which still remains above 30%.
Antoinette Sayeh emphasized the challenging steps taken by authorities to align electricity and natural gas prices with costs in 2023. Continuous adjustments and reforms in the power sector are deemed crucial for enhancing its viability and ensuring fiscal sustainability.
