Tag: bilateral support

  • SBP receives second IMF installment, total disbursements reach $1.9 billion

    SBP receives second IMF installment, total disbursements reach $1.9 billion

    The State Bank of Pakistan (SBP) announced today that it has successfully received the second installment of SDR 528 million, equivalent to $705.6 million, from the International Monetary Fund (IMF).

    This disbursement, slated to be reflected in SBP reserves for the week ending on January 19, 2024, marks a significant step in the ongoing financial collaboration between Pakistan and the IMF.

    The latest disbursement brings the total disbursements under the stand-by arrangement (SBA) to a substantial $1.9 billion.

    It is noteworthy that the remaining $1.1 billion is expected to be received after another comprehensive review scheduled for February 2024.

    As of January 5, 2024, the State Bank of Pakistan’s total reserves stand at $8.15 billion, showcasing the positive impact of the financial support received through the IMF programme.

    To recall, Pakistan secured a $3 billion SBA from the IMF towards the end of FY23, crucially preventing the nation from defaulting on its sovereign debt.

    The disbursement of the IMF funds has been phased out over two installments, subject to meticulous reviews.

    On January 11, 2024, Pakistan successfully completed the first review of the economic reform programme, a significant milestone in ensuring the country’s financial stability.

    Following the board’s approval, the IMF highlighted that economic activity has stabilised, though acknowledging that the outlook remains challenging and is contingent on the implementation of sound policies.

    Pakistan’s 9-month SBA aims to provide a robust policy anchor for addressing both domestic and external balances, serving as a framework for continued financial support from multilateral and bilateral partners.

    This financial collaboration with the IMF is instrumental in navigating Pakistan through economic challenges, providing a solid foundation for sustained growth and stability in the region.

    The country remains committed to implementing prudent economic policies as outlined in the reform programme, with the ongoing support of international partners.

  • IMF receives assurance of $1 billion from UAE to support Pakistan’s economy

    IMF receives assurance of $1 billion from UAE to support Pakistan’s economy

    In a significant development towards reviving the stalled bailout programme, the authorities in the United Arab Emirates (UAE) have pledged to provide $1 billion in bilateral support to Pakistan, according to Finance Minister Ishaq Dar.

    Dar tweeted, “UAE authorities have confirmed to the IMF for their bilateral support of $1 billion to Pakistan.” He also stated that the State Bank of Pakistan is currently in the process of completing the necessary documentation to receive the deposit from the UAE authorities.

    Pakistan was required to provide assurance that its balance of payments deficit is fully financed for the remaining period of the IMF programme, which has been stalled since November last year. Last month, the IMF’s Director of Strategic Communications, Julie Kozack, emphasised that “timely financial assistance from external partners will be critical to support the authorities’ policy efforts and ensure the successful completion of the review [with Pakistan].” She added, “Ensuring that there is sufficient financing to support the authorities is the paramount priority. A Staff Level Agreement (SLA) will follow once the few remaining points are closed.”

    Earlier this month, Saudi Arabia also pledged to provide a $2 billion loan to Pakistan, according to Pakistan’s Minister of State for Finance Aisha Ghaus Pasha. The country’s economic situation has been further exacerbated by months of political and economic turmoil, crippling floods last year and record inflation. Pakistan has been grappling with a debt crisis and foreign exchange reserves have fallen to less than four weeks of imports.

    In an effort to ease the situation, China has agreed to refinance $2 billion, of which $1.7 billion has already been credited to Pakistan’s central bank. China also rolled over a $2 billion loan last month, providing relief during Pakistan’s acute balance of payments crisis. However, talks with the IMF for a delayed $1.1 billion loan tranche, part of the bailout agreed in 2019, have been ongoing.