ISLAMABAD: To review the $3 billion stand-by agreement for Pakistan finalized at the end of June, the International Monetary Fund’s (IMF) executive board will meet today (Wednesday).
Pakistan anticipates the board will provide the first loan programme tranche of $1.1 billion. The board’s permission is necessary for the initial disbursement. It was said that the IMF would not transfer cash from the previous programme before it ended on June 30 because Pakistan was missing from an earlier schedule published in June. The IMF and Pakistan signed a stand-by agreement on June 29 to help the nation’s financial crisis.
Typically, the board’s approval comes after a staff-level agreement is completed. The Pakistani government had hoped to get $2.5 billion from the IMF but received $3 billion instead. Eight of the 11 programme reviews scheduled for Pakistan had already been approved, and the ninth review had been pending since November of the previous year. In an earlier letter of intent, Pakistan also promised the IMF that no additional tax amnesty would be implemented in the following nine months.
The State Bank of Pakistan (SBP) governor and Finance Minister Ishaq Dar signed the letter, which promised the lifting of trade restrictions and adherence to agreements made with other financial organizations and bilateral donors who have granted loans to the country. The IMF meeting was held a day after Saudi Arabia provided Pakistan $2 billion in financial assistance. Dar reported on Tuesday that Saudi Arabia had deposited the money with the SBP to increase foreign exchange reserves. The finance minister thanked Saudi Arabia in a taped video statement on behalf of the prime minister and the army leader, calling it a “great gesture” from the faithful friend.
Saudi Arabia pledged the money in April but didn’t deposit it with the SBP until it was certain that the IMF bailout would happen. The minister predicted that the economy would continue to improve and move in the direction of growth, noting that the country’s economy had already stabilized thanks to the current administration’s efforts.
