State Bank of Pakistan receives USD 1.1 billion funding from IMF
Apr 30, 2024
Islamabad [Pakistan], April 30 : The State Bank of Pakistan (SBP) has received around USD 1.1 billion from the International Monetary Fund (IMF), a day after the global lender approved the last tranche of Pakistan under the USD 3 billion Stand-By Arrangement (SBA), reported Geo News.
The IMF's executive board has given the green light for a USD 1.1 billion loan tranche for Pakistan, signalling the conclusion of the second bailout package.
Pakistan stated on Tuesday that the amount would be reflected in the SBP's foreign exchange reserves for the week ending on May 3.
This latest funding marks the third and final installment of a USD 3 billion standby arrangement with the IMF, crucial for Pakistan to stave off a sovereign default, particularly as the existing arrangement is set to expire this month.
Last week, the SBP said its foreign exchange reserves dropped by USD 74 million to USD 7.981 billion in the week ending on April 19 because of external debt repayments.
Moreover, the country's foreign reserves fell by USD 93 million to USD 13.281 billion, reported Geo News.
According to the SBP, the reserves of commercial banks also decreased by USD 20 million to USD 5.299 billion.
Earlier on Monday, the IMF issued a statement, stating that the executive board completed the second and final review of Pakistan's economic reform programme supported by the SBA.
"The board's decision allows for an immediate disbursement of SDR 828 million (around USD 1.1 billion), bringing total disbursements under the arrangement to SDR 2.250 billion (about USD 3 billion)."
Notably, this was the third and last tranche of a USD 3 billion SBA with the IMF, which Pakistan secured last summer to avert a sovereign default, according to Geo News.
Looking ahead, Pakistan is eyeing a new, more substantial IMF loan over a longer duration. Finance Minister Muhammad Aurangzeb has indicated that Islamabad could secure a staff-level agreement on the new program as early as July.
The focus is on securing a loan spanning at least three years to bolster macroeconomic stability and implement much-needed structural reforms. However, the exact scale of the program remains undisclosed.
IMF, the global lender said that the nine-month SBA, approved by the executive board on July 12, last year, successfully provided a policy anchor to address domestic and external imbalances as well as a framework for financial support from multilateral and bilateral partners.
