ISLAMABAD: In essential support to stabilise the country’s teetering economy, the State Bank of Pakistan (SBP) re-ceived approximately $1.03 billion (SDR 760 million) on Friday under the International Monetary Fund’s (IMF) $7 billion Extended Fund Facility (EFF) programme.
Pakistan had been working on implementing conditions deemed “strict” to complete the loan pro-gramme agreed to in July, which Prime Minister Shehbaz Sharif time and again hoped would be Paki-stan’s last.
The IMF Executive Board approved a 37-month loan on Wednesday.
These fresh inflows will be reflected in the central bank’s liquid foreign exchange reserves figures, which will be released on Thursday, October 3, 2024, the SBP said in a statement.
Following the long-awaited approval, the IMF said the new programme would require “sound policies and reforms” to strengthen macroeconomic stability and address structural challenges alongside “con-tinued strong financial support from Pakistan’s development and bilateral partners”.
Though, the country’s economy has stabilised since it came close to defaulting last summer, it is de-pendent on IMF bailouts and loans from friendly countries to service its huge debt, which swallows up half of its annual revenues.
“There will be transitional pain, but if we are to make it the last programme, then we have to carry out structural reforms,” Finance Minister Muhammad Aurangzeb told Geo News in an exclusive talk.
The IMF said in a statement it would issue an “immediate disbursement” of around $1 billion.
“This past year has seen a very welcome return to economic stability in Pakistan,” IMF Pakistan mission chief Nathan Porter told reporters on Thursday.
“The challenge confronting Pakistan now is to move beyond this renewed sense of stability and to-wards stronger and sustained growth, with its benefits shared more broadly and evenly across socie-ty,” he added.
Speaking on the sidelines of the United Nations General Assembly in New York on Wednesday, Prime Minister Shehbaz Sharif said the deal came through thanks to the “tremendous support” of Saudi Ara-bia, China and the United Arab Emirates.
“In the final phase (of negotiations), the IMF’s conditions were related to China. The way the Chinese government supported and strengthened us during this time is something I am truly grateful for,” he told reporters shortly before the deal was announced.
Last month, Aurangzeb had said Pakistan was negotiating a $12 billion loan reprofiling from bilateral lenders.
The amount comprised $5 billion from Saudi Arabia, $4 billion from China and $3 billion from the UAE for a three- to five-year period.
Porter said all three countries had “provided significant financing assurances,” beyond these commit-ments to rolling over the $12 billion in existing loans. –Agencies
