IMF Executive Board to review $3bn loan agreement for Pakistan

Positive developments expected for Pakistan's economy, says Finance Minister

ISLAMABAD: Today, the executive board of the International Monetary Fund (IMF) is convening to review Pakistan’s $3 billion stand-by agreement, which was finalized at the end of June. 

Pakistan is anticipating that the board will also release the first installment of $1.1 billion as part of the loan program, pending the board’s approval.

There was speculation earlier in June when Pakistan was absent from the initial schedule, leading to concerns that the IMF would withhold funds from the previous program that expired on June 30. However, on June 29, Pakistan and the IMF reached a stand-by arrangement to alleviate the country’s financial crisis.

Typically, the board grants approvals once a staff-level agreement is reached. While the Pakistan government expected around $2.5 billion from the IMF, they were ultimately granted $3 billion. Pakistan has already fulfilled eight out of the 11 listed program reviews, with the ninth review pending since November of the previous year.

In addition, Pakistan has submitted a letter of intent to the IMF, assuring them that no new tax amnesty will be introduced in the next nine months. The letter, signed by Finance Minister Ishaq Dar and the State Bank of Pakistan governor, guarantees the removal of trade barriers and the fulfillment of commitments to other financial institutions and bilateral donors who have provided loans to the country.

The IMF meeting takes place a day after Pakistan received $2 billion in financial support from Saudi Arabia. Finance Minister Dar expressed gratitude to Saudi Arabia for the deposit, stating that it is a significant gesture from their long standing ally. The funds were pledged by Saudi Arabia in April but were held until the IMF bailout was confirmed.

The minister further noted that there would be more positive developments in the future that would contribute to the country’s economic growth. He emphasized that the current government’s efforts have already helped stabilize the economy.

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