SBP confirms receiving $1.1bn tranche from IMF

KARACHI: Pakistan on Tuesday received the much-awaited $1.1 billion final tranche from the International Monetary Fund (IMF) as part of the $3 billion standby arrangement, the State Bank of Pakistan (SBP) confirmed.

The SBP said it received Special Drawing Rights (SDR) 828 million — equivalent to $1.1 billion in value — “following the successful completion of the second review by the Executive Board of IMF under Stand By Arrangement (SBA)”

The central bank said that the disbursement will be reflected in SBP reserves for the week ending on May 3, 2024.

A day earlier, IMF’s Executive Board completed the second review under the Stand-By Arrangement (SBA) for Pakistan, allowing for bringing total disbursements under the arrangement to about $3 billion.

“The completion of the second and final review reflects the authorities’ stronger policy efforts under the SBA, which have supported the stabilisation of the economy and the return of modest growth,” the IMF said in a statement.

“To move Pakistan from stabilization to a strong and sustainable recovery the authorities need to continue their policy and reform efforts, including strict adherence to fiscal targets,” the statement added.

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.

The development came 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.