ISLAMABAD: Prime Minister Shehbaz Sharif said on Tuesday the International Monetary Fund’s approval of $1.1 billion in funding for Pakistan would bring economic stability, amid discussions for a new bailout loan.
The funding is the second and last tranche of a $3 billion standby arrangement with the IMF, which Islamabad secured last summer to help avert a sovereign default.
The approval came a day after Sharif discussed a new loan program with IMF Managing Director Kristalina Georgieva on the sidelines of the World Economic Forum in Riyadh.
“Sharif expressed his satisfaction over the release of the last financial tranche of the IMF today,” the Prime Minister’s Office (PMO) said in a statement. “Receiving the last tranche of 1.1 billion dollars from the IMF will bring more economic stability in Pakistan.”
This is the second Stand-by Arrangement (SBA) for short-term financial assistance that Pakistan has completed, the last one being in 2016 during the government of three-time PM Nawaz Sharif, who is Sharif’s elder brother.
“Bitter and difficult decisions were taken for the economic security of Pakistan, but their fruits are coming in the form of economic stability,” Sharif added about reforms under the IMF program.
The $350 billion economy faces a chronic balance of payments crisis, with nearly $24 billion to repay in debt and interest over the next fiscal year — three-time more than its central bank’s foreign currency reserves.
Islamabad is seeking a new, larger long-term Extended Fund Facility (EFF) agreement with the fund after the current standby arrangement expires this month, and continuing with necessary policy reforms to rein in deficits, build up reserves and manage soaring debt servicing.