Islamabad: The International Monetary Fund (IMF) announced the approval of a USD 3 billion loan agreement for Pakistan, according to news published on July 13. This decision provides vital financial support for the country’s struggling economy.
The IMF’s executive board has approved a nine-month standby arrangement (SBA) for Pakistan, providing financial support for the country’s economic stabilization program. The approval follows a staff-level agreement between the IMF and Pakistan announced earlier. The IMF’s executive board’s decision allows for an immediate disbursement of approximately USD 1.2 billion in USD.
The total bailout package approved by the board is valued at 2.25 billion Special Drawing Rights (SDRs), which are reserve funds allocated to member nations by the IMF. This amount translates to around USD 3 billion or 111% of Pakistan’s quota. The IMF stated that the primary objective of the economic reform program is to assist Pakistan in stabilizing its economy, protecting against potential shocks, and creating room for social and development spending.
The IMF’s statement emphasized the importance of steadfast policy implementation for Pakistan’s economic success. It highlighted the need for greater fiscal discipline, a market-determined exchange rate, progress on energy sector reforms, climate resilience, and improvements in the business climate. The IMF’s program for Pakistan will focus on four key points, including the implementation of the 2023-24 budget, a return to a market-determined exchange rate, tight monetary policy for disinflation, and progress on structural reforms.
Out of the approved amount, USD 1.2 billion will be immediately disbursed, while the remaining funds will be phased in over the duration of the program. The disbursement of the remaining amount is subject to two quarterly reviews to assess Pakistan’s progress in implementing the agreed-upon policies and reforms.
Prime Minister (PM) Shehbaz Sharif welcomed the IMF’s approval, stating that it is a significant step forward in the government’s efforts to stabilize the economy and achieve macroeconomic stability. He emphasized that it would provide fiscal space for charting the way forward.
Iqra holds BS in International Relations and is passionate about writing engaging content on trending real estate topics. When not working, she is either spending time with family, shopping, or discussing shows & movies.
