WASHINGTON: As expected, the executive board of the International Monetary Fund (IMF) met here today and formally approved the $3 billion standby arrangement for Pakistan, which was finaliszed at the end of June.
The IMF said the programme would focus on the “implementation of the FY24 budget to facilitate Pakistan’s needed fiscal adjustment and ensure debt sustainability”.
The approval allows for an immediate disbursement of $1.2 billion.
“The remaining amount will be phased over the programme’s duration, subject to two quarterly reviews,” it added.
IMF’s approval comes after Saudi Arabia and the United Arab Emirates (UAE) deposited $3 billion and $1 billion, respectively, in the State Bank of Pakistan, boosting the foreign exchange reserves.
Last month, the IMF had reached a staff-level pact with Pakistan on a $3 billion Standby Arrangement, a decision long awaited by the country, which is teetering on the brink of default.
The $3bn funding, spread over nine months, is higher than expected for Pakistan. The country was awaiting the release of the remaining $2.5bn from a $6.5bn bailout package agreed in 2019, which expired in June.
Earlier, Pakistan also submitted a letter of intent to the IMF, assuring the lender that no new tax amnesty would be introduced in the next nine months.
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