KARACHI: Pakistan has successfully received a tranche of $498.7 million under the Extended Fund Facility (EFF) from the International Monetary Fund (IMF), as confirmed by the State Bank of Pakistan (SBP) on Tuesday.
The central bank announced that it had completed the transaction, acquiring the IMF tranche of $498.7 million, equivalent to Special Drawing Rights (SDR) 350 million, under the Extended Fund Facility.
This development follows the decision made by the Executive Board of the IMF on March 24, 2021, to allow the disbursement of $500 million under the Extended Fund Facility for Pakistan. The disbursement is part of the ongoing support provided by the IMF to assist the country in navigating economic challenges and implementing necessary reforms.
The IMF’s Executive Board completed the second through fifth reviews of the Extended Arrangement under the EFF for Pakistan. The decision paved the way for an immediate disbursement of SDR 350 million, approximately US$500 million, bringing the total purchases for budget support under the arrangement to about US$2 billion, as outlined in a statement issued by the IMF.
Pakistan initially entered into a 39-month EFF arrangement with the IMF, which was approved by the Executive Board on July 3, 2019, for about $6 billion at the time of approval. This represented 210 percent of Pakistan’s quota within the IMF.
The overarching goal of the program is to support Pakistan’s policies in navigating the economic challenges posed by the ongoing Covid-19 pandemic. The program aims to protect lives and livelihoods, ensure macroeconomic and debt sustainability, and advance structural reforms to lay the foundations for robust, job-rich, and sustained growth that benefits all citizens.
As Pakistan continues to grapple with the multifaceted impacts of the Covid-19 pandemic, the financial support from the IMF is crucial in maintaining stability and promoting economic recovery. The funds received under the Extended Fund Facility will contribute to bolstering the country’s efforts to address immediate economic challenges while also supporting long-term growth and development. The government will likely deploy these resources strategically to implement key reforms and sustain economic resilience in the face of global uncertainties.