Islamabad, July 13, 2023 – The International Monetary Fund (IMF) has transferred $1.2 billion to the State Bank of Pakistan (SBP) as part of a total of $3 billion approved by the IMF board. The remaining balance of $1.8 billion will be provided after two upcoming reviews scheduled for November 2023 and February 2024.
Federal Minister for Finance and Revenue, Senator Mohammad Ishaq Dar, spoke to media persons, expressing gratitude for the IMF funds, which will significantly improve Pakistan’s foreign exchange reserves. He highlighted that a total of approximately $4.2 billion has been added to the country’s reserves this week, including $2 billion from Saudi Arabia, $1 billion from the United Arab Emirates, and $1.2 billion from the IMF.
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Exact figures regarding the reserves will be issued by the State Bank on Friday, with expectations that they will reach between $13 to $14 billion. Minister Dar credited Prime Minister Shehbaz Sharif and his economic team for their dedicated efforts over the past eight months in realizing this program.
The minister emphasized that the agreement has a duration of nine months, allowing the newly elected government to make crucial decisions for the future. He expressed optimism about Pakistan’s progress in a positive direction and stressed the need to consolidate the gains and steer the economy toward a growth trajectory.
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It is worth mentioning that the IMF Executive Board approved a Stand-By Agreement (SBA) worth $3 billion for Pakistan. The agreement, reached in late June, encompasses a staff level agreement on SBA amounting to Special Drawing Rights (SDR) 2,250 million (equivalent to about $3 billion or 111 percent of Pakistan’s IMF quota). This new SBA builds upon the efforts made by Pakistani authorities under the 2019 Extended Fund Facility-supported program, which expired at the end of June.
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The IMF’s statement highlights that the SBA comes at a challenging economic juncture for Pakistan, with a difficult external environment, devastating floods, and policy missteps leading to significant fiscal and external deficits, rising inflation, and depleted reserve buffers during FY23. Pakistan’s new SBA-supported program will serve as a policy anchor to address domestic and external imbalances, providing a framework for financial support from multilateral and bilateral partners.
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