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IMF approves tranche worth $506.4mn to Pakistan under the EFF

WASHINGTON: The Executive Board of the International Monetary Fund (IMF) on Friday completed the seventh review of Pakistan’s economic performance under a three-year program supported by an Extended Fund Facility (EFF) arrangement, ARY News has learnt.

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The Board’s decision enables the immediate disbursement of an amount equivalent to $506.4 million, bringing total disbursements under the arrangement to $ 4.05 billion.

According to the press release issued by IMF, at the conclusion of Executive Board discussion on Pakistan, Deputy Managing Director and Acting Chair, Mitsuhiro Furusawa praised Pakistan by saying that “Progress toward macroeconomic stabilization is encouraging, thanks to strong performance under the program and despite significant legal, political, and security challenges.”

Mitsuhiro Furusawa expressed satisfaction over the planned fiscal adjustment in the context of the FY2015/16 budget.

He hailed Pakistan authorities’ plans to broaden the tax base, including eliminating tax exemptions and concessions.

“The authorities are implementing plans to reduce costly and inefficient electricity subsidies, and steps are being taken to contain arrears in the electricity sector, while boosting support for the most vulnerable”, he added.

“Foreign exchange reserves have continued to increase and monetary policy has remained appropriate under current macroeconomic conditions”, said Deputy Managing Director and Acting Chair IMF.

“The financial sector remains stable and progress in bank capitalization is welcome. A number of legislative reforms to strengthen financial stability and inclusion are underway. Efforts to combat financing terrorism, anti-money laundering, and tax offenses should continue”, he added.

The Executive Board approved the three-year extended arrangement under the EFF on September 4, 2013 worth $6.18 billion, or 425 percent of Pakistan’s quota at the IMF.

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