Pakistan receives $1.2 billion from IMF: Finance minister Dar

ISLAMABAD: The IMF has transferred $1.2 billion to Pakistan, Finance Minister Ishaq Dar mentioned on Thursday, a day after the worldwide lender authorised a $3 billion bailout programme for the cash-strapped nation.
The Worldwide Financial Fund (IMF) had signed a Stand-by Settlement on the finish of June to offer Pakistan a short-term mortgage for a interval of 9 months and its government board formally authorised the $3 billion bailout programme on Wednesday to help the federal government’s efforts to stabilise the nation’s ailing economic system.
It mentioned that the board authorised the bailout package deal for the nation for an quantity of $2.25 billion Particular Drawing Rights (SDRs) – reserve funds that the establishment credit to the accounts of its member nations, which quantities to about $3 billion.
On Thursday, Finance Minister Dar introduced that the worldwide lender had transferred $1.2 billion to the State Financial institution of Pakistan.
Addressing the media, Dar mentioned when the Standby Association (SBA) was finalised, it was determined that $1.2 billion can be given upfront whereas the “stability quantity” of $1.8 billion can be handed over after two critiques in November and February.
“I need to share the data that the upfront fee of $1.2 billion, the IMF has transferred it to the State Financial institution of Pakistan’s (SBP) account,” he mentioned.
The finance minister mentioned that the IMF’s Govt Board had authorised the SBA with Pakistan and famous that this was a nine-month programme beneath which Islamabad would obtain $3 billion.
He mentioned that the funds would shore up Pakistan’s overseas trade reserves, noting that this might additionally embody the $1 billion transferred by the United Arab Emirates a day earlier.
Dar mentioned that the overseas reserves elevated by $4.2 billion in the course of the week after Saudi Arabia and the UAE offered $2 billion and $1 billion respectively. “So I’m anticipating that our foreign exchange reserves will shut at $13-14 billion by tomorrow. The state financial institution will give the precise numbers,” he mentioned.
The IMF deal has successfully averted the specter of default.
The event got here two weeks after the 2 sides reached a staff-level settlement over the stand-by association.
The worldwide lender on Wednesday mentioned that the programme would concentrate on the “implementation of the FY24 funds to facilitate Pakistan’s wanted fiscal adjustment and guarantee debt sustainability”.
“The association comes at a difficult financial juncture for Pakistan. A troublesome exterior atmosphere, devastating floods, and coverage missteps have led to giant fiscal and exterior deficits, rising inflation, and eroded reserve buffers” within the fiscal 12 months 2023,” Washington-based IMF mentioned within the assertion.
Dar mentioned that Pakistan went for a “smaller” SBA with the worldwide lender as an alternative of the ninth assessment of the mortgage programme.
“This (programme) has been restricted to 9 months in order that whichever authorities comes into energy after the elections could make its owns selections,” the minister mentioned.
Pakistan’s economic system has been in a free fall mode for the final a few years, bringing untold strain on the poor lots within the type of unchecked inflation, making it virtually inconceivable for an enormous variety of individuals to make ends meet.
Pakistan had been struggling to rearrange sufficient overseas trade to fulfill the IMF, which refused to offer the remaining $2.5 billion out of a $6.5 billion mortgage programme signed in 2019 and expired on June 30 this 12 months.