Islamabad (AGENCIES): The International Monetary Fund (IMF) Executive Board has approved a Stand-by Agreement (SBA) of $3 billion for Pakistan, as announced on the IMF’s website.
The agreement was reached after discussions between the IMF staff team, led by Nathan Porter, and Pakistani authorities in late June. The SBA builds upon the efforts made under Pakistan’s 2019 Extended Fund Facility program, which was set to expire at the end of June. Finance and Revenue Minister Mohammad Ishaq Dar shared the news on his Twitter account, highlighting the positive impact on the country’s foreign exchange reserves. Saudi Arabia and the United Arab Emirates have already deposited $2 billion and $1 billion, respectively, with the State Bank of Pakistan, boosting the total foreign exchange reserves to over $12.7 billion. The approved SBA will support the government’s immediate efforts to stabilize the economy, maintain macroeconomic stability, and provide a framework for financing from multilateral and bilateral partners. It will also create room for social and development spending through improved domestic revenue mobilization and careful spending execution to address the needs of the Pakistani people. The finance minister expressed that the government is committed to completing this program, emphasizing the importance of steadfast policy implementation and necessary reforms, particularly in the energy sector, to promote resilience and improve the business climate. The immediate disbursement of SDR894 million (approximately $1.2 billion) is now available, with the remaining amount to be phased over the duration of the program, subject to quarterly reviews. This agreement marks an important step towards economic stabilization and addressing the challenges faced by Pakistan, with a focus on fiscal discipline, exchange rate management, and ongoing reforms.
