ISLAMABAD: Pakistan is set to receive the next tranche of its International Monetary Fund (IMF) loan program, as the financial watchdog Executive Board has scheduled a crucial meeting on May 8 to consider the approval.
According to official sources, the board is expected to approve more than $1.2 billion for Pakistan under the ongoing program. The disbursement falls under the $7 billion Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) agreed between Pakistan and the IMF.
The development follows the successful completion of the third review of Pakistan’s economic performance, which has strengthened expectations of the release of approximately $1 billion. In addition, Pakistan is likely to receive around $210 million under the RSF after the completion of its second review.
Officials said that Pakistan and the IMF had reached a staff-level agreement on March 27, paving the way for board-level approval and subsequent disbursement.
The expected approval is seen as a significant step in supporting Pakistan’s economic stability, boosting foreign exchange reserves, and reinforcing investor confidence as the country continues its reform agenda under the IMF program.
IMF urges Pakistan to shift all public funds to Treasury Single Account
A day earlier, the International Monetary Fund had urged Pakistan to ensure that all public sector entities deposit their funds into a Treasury Single Account (TSA) instead of keeping them in commercial bank accounts.
According to sources, the IMF has expressed concern that government entities have collectively parked over Rs1 trillion in commercial banks rather than transferring these funds to the TSA.
The Fund has advised the federal government to reduce its reliance on borrowing and instead utilize idle funds held by public institutions by consolidating them into a single treasury account.
It has also emphasized the need for the government to maintain full control over public finances to ensure transparency and fiscal discipline.
Sources revealed that many public entities are keeping around Rs1,000 billion in private bank accounts, earning profits, while the government borrows from the same banks at significantly higher interest rates to finance its fiscal deficit.
The IMF has called for bringing all public funds under a unified system, noting that this would improve cash management and reduce unnecessary borrowing.
Under the Public Finance Management Act 2019, all public revenues are required to be deposited into the Federal Consolidated Fund through a Treasury Single Account maintained at the State Bank of Pakistan. However, weak oversight by the Ministry of Finance has hindered full implementation.
According to sources, Pakistan has assured the IMF in writing that it will transfer public funds into the TSA framework.