IMF Board Approves $3 Billion Deal to Assist Cash-Strapped Pakistan
In a significant development, the International Monetary Fund (IMF) announced on Wednesday that it has given the green light to a $3 billion loan agreement for Pakistan. This decision is expected to provide much-needed financial support to help stabilize the country’s economy in South Asia.
The IMF announced that its executive board has approved a nine-month standby arrangement to support the authorities’ economic stabilization program.
Hot off the press! Following a recent agreement between the fund and Pakistan that was announced last month, the latest approval paves the way for an immediate disbursement of approximately $1.2 billion.
Pakistan has suffered from a balance-of-payments crisis as it attempts to service crippling external debt amid a fraught political environment – following the removal of the country’s former prime minister Imran Khan.
Inflation has rocketed, the rupee has reached a record low against the dollar and the country is struggling to afford imports, causing a severe decline in industrial output.
In a tweet, Pakistan’s prime minister, Shehbaz Sharif, said the IMF’s approval was “a major step forward” in the government’s efforts to stabilize the economy and achieve macroeconomic stability.
“It bolsters Pakistan’s economic position to overcome immediate- to medium-term economic challenges,” giving authorities fiscal space to chart the way forward, he added.
Pakistan has brokered close to two dozen arrangements with the IMF, most of which have gone uncompleted.
In the days before the decision was approved, Pakistan received $3 billion in deposits from Saudi Arabia and the United Arab Emirates.
The money from the two Gulf countries boosted Pakistan’s foreign reserves to $7.5 billion – more than double last week’s account balance.
