In a relief to cash-strapped Pakistan, the International Monetary Fund (IMF) on Wednesday gave a final nod to a USD 3 billion “stand-by arrangement” for the country to support the government’s efforts to stabilise the ailing economy.
The development came two weeks after the two sides reached a staff-level agreement over the “stand-by arrangement”.
“The Executive Board of the IMF approved a 9-month Stand-By Arrangement (SBA) for Pakistan for an amount of SDR2,250 million (about $3 billion) to support the authorities’ economic stabilisation programme,” the global lender said in a statement. Dawn newspaper reported that the approval allows for an immediate disbursement of USD 1.2 billion.
The global lender said that the programme would focus on the implementation of the FY24 budget to facilitate Pakistan’s needed fiscal adjustment and ensure debt sustainability. The development came after Pakistan received USD 2 billion from Saudi Arabia and USD 1 billion from the UAE as per conditions of the fund.
Pakistan has been struggling to get IMF support for its ailing economy. It is believed that the new loan will improve the country’s foreign exchange reserve and also open the door to multilateral loan agreements with institutions and countries.
Prime Minister Shehbaz Sharif hailed yhe move and said that it bolsters Pakistan’s economic position to overcome immediate- to medium-term economic challenges, giving the next government the fiscal space to chart the way forward.
Pakistan’s economy has been in a free fall mode for the last many years, bringing untold pressure on the poor masses in the form of unchecked inflation, making it almost impossible for a vast number of people to make ends meet.
