By Staff Reporter
ISLAMABAD: Pakistan is waiting for the International Monetary Fund (IMF) to approve the first review of its $3 billion Standby Arrangement (SBA) and release the second tranche of $700 million, but the IMF’s executive board is unlikely to take up the case until mid-December.
The Ministry of Finance has been seeking a date in the first week of December for the IMF’s executive board to take up Pakistan’s case, but the board’s schedule is already packed with other countries’ cases until December 14.
The Fund’s executive board members will be on holiday in the last week of December and the first week of January, delaying Pakistan’s access to the funds, which are crucial for its balance of payments and fiscal stability.
The IMF updated the schedule of its executive board meetings. Excluding Kyrgyzstan’s case on Monday, there are about 12 countries whose cases, both Article-IV consultations and programme reviews, are on the executive board agenda until December 14.
The countries are Armenia, Bangladesh, Belgium, Benin, Cabo Verde, Congo, Côte d’Ivoire, Moldova, Rwanda, Senegal, Somalia, and Sri Lanka.
These meetings encompass various aspects, including Article IV consultations on economic developments and policies of member states. The board also reviews IMF assistance packages, such as the extended fund facility (EFF) it signed with Pakistan.
Normally, the IMF board of executive directors takes about a fortnight after the staff-level agreement for approval, unless there are some outstanding prior actions.
In Pakistan’s case, no prior action is outstanding for the first quarterly review. The IMF staff and the Pakistani authorities reached a staff-level agreement (SLA) on the first review under the SBA on November 15 in Islamabad, subject to approval by the IMF’s executive board.
Upon approval, Pakistan will have access to SDR 528 million (around $700 million).
The current IMF programme of $3 billion is scheduled to end in the second week of April 2024, with around $1.8 billion remaining undisbursed. The Fund released $ 1.2 billion as the first tranche in July.
The first review with the IMF was smooth and resulted in the immediate announcement of an SLA as most of the quantitative targets had been met by Pakistan.
The IMF mission praised the authorities for their commitment to the reform agenda and urged them to return to the market-determined exchange rate and to address the risks that may arise from geopolitical tensions, rise in commodity prices and difficult global financial conditions.
The IMF also advised the authorities to continue efforts to build resilience and to ensure timely disbursement of committed external support from multilateral and official bilateral partners, such as Saudi Arabia, which rolled over a $3 billion deposit well before maturity, the sources said.
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