The International Monetary Fund’s (IMF) executive board will meet today (Wednesday) to review the $3 billion stand-by agreement for Pakistan, which was finalised at the end of June.
Pakistan expects the board to also release the first tranche of $1.1bn as part of the loan programme. The initial disbursement is contingent upon the board’s approval.
Pakistan was absent from an earlier schedule released in June, igniting speculation that the IMF was not going to release funds from the previous programme that expired on June 30. On June 29, the IMF and Pakistan reached a stand-by arrangement to ease the country’s financial crisis.
The board’s approvals are generally granted once a staff-level agreement is done. The Pakistan government was expecting about $2.5bn from the IMF, but it was given $3bn. Pakistan had earlier cleared eight of the 11 listed programme reviews, with the ninth review pending since November last year.
Earlier, Pakistan also submitted a letter of intent to the IMF, assuring the lender that no new tax amnesty would be introduced in the next nine months.
The letter, signed by Finance Minister Ishaq Dar and the State Bank of Pakistan (SBP) governor, guaranteed the removal of trade barriers and upholding commitments to other financial institutions and bilateral donors that have provided loans to the country.
The IMF meeting comes a day after Pakistan received $2bn in financial support from Saudi Arabia. On Tuesday, Dar said Saudi Arabia had deposited the funds with the SBP, boosting foreign exchange reserves.
“I thank Saudi Arabia on behalf of the prime minister and the army chief,” the finance minister said in a recorded video statement, terming it a “great gesture” from the longtime ally.
Riyadh had pledged the funds in April but had held off depositing the money with the SBP until it was sure that the IMF bailout would be forthcoming.
The minister said that some more good developments would follow and lead the economy towards growth, adding that the economy of the country had already stabilised through the efforts of the incumbent government.
