'Pakistan to receive IMF's tranche in third week of August'

KARACHI: Pakistan will receive the $1.17 billion tranche from International Monetary Fund (IMF) in the third week of August under the Extended Fund Facility (EFF) programme, the officials of the State Bank of Pakistan (SBP) said on Wednesday.

In a statement, the SBP officials claimed that there was no obstacle in receiving the payment from the global lender.

“Pakistan is bound to fulfill all conditions of the IMF,” the officials said, adding that work on some conditions was already started before the staff-level agreement was reached.

According to SBP officials, political instability was no longer a problem for the global lender. “The IMF is more concerned about the budget deficit and subsidies given by the government,” they added.

The officials pointed out that the year 2022 was more difficult for Pakistan than coronavirus. “Both the US dollar and inflation increased this year,” they said, adding that IMF did not trust Pakistan because the PTI government had gone back on its agreement with the institution.

Meanwhile, the SBP officials ruled out that the country may default, saying that the country’s major problem was energy import bill. “The government will reduce the energy import bill so that dollar reserves do not decease,” they added.

Earlier on July 14, the International Monetary Fund (IMF) and Pakistan reached a staff-level agreement for the release of US$1.17 billion under the combined 7th and 8th reviews of Pakistan’s Extended Fund Facility (EFF).

A statement issued by the Fund said that the agreement is subject to approval by the IMF’s Executive Board.

“Additionally, in order to support program implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the IMF Board will consider an extension of the EFF until end-June 2023 and an augmentation of access by SDR 720 million that will bring the total access under the EFF to about US$7 billion.”