After months-long negotiations, the International Monetary Fund (IMF) on Wednesday approved the $3 billion Standby Arrangement for Pakistan. The arrangement was finalised at the end of June. The executive board, which met today again, approved the deal for the cash-strapped country. The IMF said that the programme would focus on the “implementation of the FY24 budget to facilitate Pakistan’s needed fiscal adjustment and ensure debt sustainability”, Dawn reported.
The approval allows for an immediate disbursement of $1.2 billion, the report said. “The remaining amount will be phased over the programme’s duration, subject to two quarterly reviews.”
The global lender’s approval comes just days after Saudi Arabia and the United Arab Emirates (UAE) deposited $3 billion and $1 billion, respectively, in the country’s central bank, boosting the foreign exchange reserves.
Pakistan Prime Minister Shehbaz Sharif said the approval of the Stand-by Agreement of $3 billion by the IMF’s Executive Board was a major step forward “in the government’s efforts to stabilise the economy and achieve macroeconomic stability”. “It bolsters Pakistan’s economic position to overcome immediate- to medium-term economic challenges, giving the next government the fiscal space to chart the way forward,” he said.
“This milestone, which was achieved against the heaviest of odds & against a seemingly impossible deadline, could not have been possible without an excellent team effort. I would commend Finance Minister Ishaq Dar & his team at the Ministry of Finance for their hard work. My special thanks are also due to @KGeorgieva, MD of IMF and her team for their support & cooperation.”
Earlier in the day, Sharif said he was grateful to Mohamed Bin Zayed, the President of the UAE, for the deposit of $1 billion with the State Bank of Pakistan. “As a time-tested friend & brotherly country, the UAE has always come forward to support Pakistan. We deeply acknowledge this kind gesture & consider it critical to our efforts to stabilize the economy.”
