The International Monetary Fund (IMF) has greenlit the final $1.1 billion tranche for Pakistan’s bailout package, marking a significant step in stabilizing the country’s economic situation. This funding comes as Islamabad seeks a new, larger long-term Extended Fund Facility (EFF) agreement with the IMF after the current standby arrangement expires this month.
The executive board of the IMF approved the disbursement of $1.1 billion on Monday, as announced in a statement by the agency. This tranche is the second and last part of a $3 billion standby arrangement that Pakistan secured last summer. The purpose of this arrangement was to avert a sovereign default and address pressing economic challenges.
The approval of the tranche follows discussions between Pakistan Prime Minister Shehbaz Sharif and IMF Managing Director Kristalina Georgieva during the World Economic Forum in Riyadh. These discussions centered around the potential for a new loan program to support Pakistan’s ongoing economic reform efforts.
In seeking a new EFF agreement, Islamabad aims to secure financial assistance over at least three years to achieve macroeconomic stability and implement essential structural reforms. Pakistan’s Finance Minister, Muhammad Aurangzeb, has indicated that a staff-level agreement on the new program could be reached by early July.
While details regarding the specific loan amount remain undisclosed, Islamabad is actively engaged in discussions with the IMF to finalize the terms of the new agreement. If successful, this would mark Pakistan’s 24th IMF bailout, highlighting the country’s ongoing challenges in managing its balance of payments and debt obligations.
Pakistan’s economy, valued at $350 billion, is grappling with a chronic balance of payments crisis, exacerbated by the need to repay nearly $24 billion in debt and interest over the next fiscal year. This amount is significantly higher than the country’s current foreign currency reserves, underscoring the urgency of securing external financial support to stabilize its economic situation.
Sources By Agencies
