The International Monetary Fund (IMF) is set to approve the next $700 million tranche from its current loan program for Pakistan on January 11, according to a spokeswoman quoted by Bloomberg.
The IMF board will meet to consider the final approval after Pakistan reached a staff-level agreement with the IMF on November 16.
The loan is part of a $3 billion Stand-by Arrangement (SBA) that Pakistan and the IMF agreed on in July 2023, replacing the previous Extended Fund Facility (EFF) that expired on June 30, 2023.
The SBA aims to support Pakistan’s economic stabilization program in the face of multiple shocks and challenges.
The first tranche of $1.2 billion was disbursed immediately after the SBA was approved by the IMF board. The remaining amount will be phased over the program’s duration, subject to two quarterly reviews.
Pakistan has about $1 billion in dollar-denominated debt due next year and the caretaker government is also seeking $6.3 billion in loans from the World Bank, Asian Development Bank, and Islamic Development Bank, and about $10 billion in bilateral funding from creditor nations.
These loans will help boost the country’s foreign reserves, which fell to $7 billion in the week ended December 01, equivalent to less than two months of imports.
Earlier, Pakistan’s caretaker finance minister Dr Shamshad Akhtar had said that the country might need to continue borrowing from the IMF as its economy was fragile.