SBP receives $1.16 billion IMF tranche

By Staff Reporter

KARACHI: The central bank on Wednesday received inflows of $ 1.16 billion from the International Monetary Fund (IMF) as a loan tranche under the Extended Fund Facility.

“Today, SBP has received proceeds of USD 1.16 billion (equivalent of SDR 894 million) after the IMF Executive Board completed the combined seventh and eighth reviews under the Extended Fund Facility (EFF) for Pakistan,” the State Bank of Pakistan said on its official Twitter handle on Wednesday.

“This will help improve SBP’s foreign exchange reserves and will also facilitate the realization of other planned inflows from multilateral and bilateral sources.”

Pakistan’s foreign currency reserves in recent weeks depleted sharply due to a lack of external financing. The central bank’s reserves have fallen as low as $7.8 billion in the last week of August — enough to cover little more than a month of imports.

Earlier in the week, the IMF executive board approved a much-awaited tranche disbursement to Pakistan after completing the seventh and eighth reviews of the country’s reforms under a stalled $6 billion loan programme.

The Fund has also approved a Pakistan request to increase the size and duration of its $6 billion bailout programme.

The IMF said its board approved an extension of the EFF until end-June 2023, “rephasing and augmentation of access by SDR 720 million that will bring the total access under the EFF to about US$6.5 billion”.

Pakistan entered the IMF programme in 2019, but only half the funds have been disbursed to date as Islamabad has struggled to keep targets on track.

IMF says Pakistan’s economy has been buffeted by adverse external conditions, due to spillovers from the war in Ukraine, and domestic challenges, including from accommodative policies that resulted in uneven and unbalanced growth. Steadfast implementation of corrective policies and reforms remain essential to regain macroeconomic stability, address imbalances, and lay the foundation for inclusive and sustainable growth, it added.