By Staff Reporter
KARACHI: Pakistan and the International Monetary Fund (IMF) have reached a $3 billion staff-level agreement for a crucial bailout that could help stabilize the country’s falling economy and lift it out of an impending debt default.
“I am pleased to announce that the IMF team has reached a staff-level agreement with the Pakistani authorities on a nine-month Stand-By Arrangement (SBA) in the amount of SDR 2,250 million (about $3 billion),” Nathan Porter, who led the IMF staff team in Pakistan, said in a statement on Thursday.
The deal, which is subject to approval by the IMF board in July, comes after an eight-month delay and offers much-needed support to Pakistan, which is battling an acute balance of payments crisis and falling foreign exchange reserves.
The new stand-by arrangement builds on the 2019 program, Porter said, adding that Pakistan’s economy had faced several challenges in recent times, including devastating floods last year and commodity price hikes following the war in Ukraine.
“Despite the authorities’ efforts to reduce imports and the trade deficit, reserves have declined to very low levels. Liquidity conditions in the power sector also remain acute,” he added.
“Given these challenges, the new arrangement would provide a policy anchor and a framework for financial support from multilateral and bilateral partners in the period ahead.”
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