The State Bank of Pakistan (SBP) has received the first loan tranche of around $1.027 billion from the International Monetary Fund (IMF). This will provide a significant boost to Pakistan’s economic recovery efforts by releasing its first loan tranche. Pakistan received the funds on Friday, following the IMF Executive Board’s approval.
The State Bank of Pakistan (SBP) confirmed the inflow in a brief statement. It stated, “Following the approval of the IMF Executive Board of the 37-month Extended Fund Facility amounting to $7 billion, SBP has received the first tranche of SDR 760 million (equivalent to $1,026.9 million) from the IMF today.”
These funds will be added to the SBP’s liquid reserves, with the updated figures expected on October 3, 2024. The loan will increase the central bank’s foreign reserves to over $10 billion. As of September 20, the SBP’s foreign currency reserves stood at $9.53 billion.
Stabilizing the Country’s Reserves
This inflow comes at a critical moment for Pakistan’s economy, which has been grappling with high inflation, a balance of payment crisis, and rising external debt. The IMF’s support is likely to stabilize the country’s reserves, helping Pakistan meet its international obligations and providing much-needed relief to its economy.
The IMF approved the Extended Fund Facility to assist Pakistan in addressing these fiscal and economic challenges. Over the next 37 months, Pakistan will receive a total of $7 billion in several installments. The disbursement of this first tranche marks the beginning of the program’s implementation.
Pakistan’s government has taken several steps to meet the IMF’s conditions for the loan program. These include fiscal tightening measures, reforms in tax collection, and adjustments in energy pricing. These actions have been necessary to secure the IMF’s support and put the country on a path toward economic recovery.
The First Tranche
The arrival of the first tranche of IMF funds is a positive step for Pakistan’s economy. It will bolster the SBP’s reserves and help the country address its economic challenges. However, continuous efforts and reform are required to ensure that Pakistan remains on track with the IMF program. As the country moves forward, the government’s focus on maintaining financial discipline and implementing necessary reforms will be crucial for its economic recovery.
Follow us on Google News, Instagram, YouTube, Facebook, Whats App, and TikTok for latest updates
