The recent deposit of $1.2 billion by the International Monetary Fund (IMF) into the State Bank of Pakistan’s (SBP) account brings significant relief to Pakistan’s economic stability. The country has been grappling with financial challenges and was on the brink of defaulting on its debt obligations.
Months of rigorous negotiations finally led to the approval of a $3 billion Stand-By Agreement (SBA) by the IMF’s executive board. This nine-month program aims to support Pakistan’s economic stabilization efforts. The agreement, which exceeded Pakistan’s initial funding expectations, was reached after reaching staff-level consensus last month.
To receive the remaining funds, Pakistan will undergo two reviews. The second review is scheduled for November, followed by the third review in February. Finance Minister Ishaq Dar, in a televised address, expressed his confidence in receiving the full amount.
The deposit from the IMF is expected to significantly bolster Pakistan’s foreign exchange reserves, providing much-needed stability to the economy. Minister Dar also highlighted that the country’s central bank reserves have already seen an increase of approximately $4.2 billion during the ongoing week, indicating positive progress.
Finance Minister Dar expressed his gratitude to Prime Minister Shehbaz Sharif for his instrumental role in securing the program. Prime Minister Sharif personally engaged with the IMF’s chief, holding discussions in Paris and through phone calls, demonstrating the government’s commitment to stabilizing the economy.
The IMF’s official statement confirmed the approval of the nine-month standby arrangement, emphasizing its purpose of providing support to Pakistan’s economic stabilization program. This injection of funds offers a promising opportunity for Pakistan to address its financial challenges and work towards long-term economic growth and stability.
