IMF board approves $1.1bn loan tranche for Pakistan

ISLAMABAD: The executive board of the International Monetary Fund (IMF) on Monday approved $1.1 billion loan tranche for Pakistan, marking the end of the second bailout package, ARY News reported citing sources.

The funding is the third and last tranche of a $3 billion standby arrangement with the global lender, which it secured last year to avert a sovereign default and which runs out this month.

The final tranche was approved after the IMF Executive Board meeting in Washington today that discussed Pakistan’s request for the release of funds.

Insiders told ARY News that Pakistan is likely to receive the loan payment tomorrow, with IMF greenlighting the disbursement after approval.

Last month, the International Monetary Fund (IMF) reached a staff-level agreement with Pakistan on the final review of a $3 billion bailout package.

So far, the country has received two tranches of $1.2 billion in July and $700 million in January 2024, totaling $1.9 billion.

Pakistan is seeking a new long-term and larger IMF loan, with Finance Minister Muhammad Aurangzeb saying Islamabad could secure a staff-level agreement on the new program by early July.

Islamabad says it is seeking a loan over at least three years to help macroeconomic stability and execute a long-due and painful structural reforms, though Aurangzeb has declined to detail what seize of programme the country seeks. If secured, it would be the 24th IMF bailout for Pakistan.

Read More: Pakistan makes formal request for fresh IMF package

The development came a day after Prime Minister Shehbaz Sharif’s meeting with IMF MD Kristalina Georgieva wherein he reiterated his government’s commitment to put Pakistan’s economy back on track.

In the meeting held on the sidelines of the World Economic Forum Special Meeting here, the prime minister said that he had directed his financial team, led by Finance Minister Muhammad Aurangzeb to carry out structural reforms, ensure strict fiscal discipline and pursue prudent policies that would ensure macro-economic stability and sustained economic growth.

He thanked Georgieva for supporting Pakistan in securing the $3 billion Standby Arrangement (SBA) from the IMF last year that was about to be completed.