The International Monetary Fund (IMF) has made a significant deposit of $1.2 billion in the State Bank of Pakistan (SBP). This deposit is part of the recently approved $3 billion Stand-by Arrangement (SBA) program.
First Tranche Received, Boosting Foreign Exchange Reserves
In a media briefing, Finance Minister Ishaq Dar confirmed that the central bank has received the first tranche of $1.2 billion from the IMF. He further explained that the remaining $1.8 billion will be disbursed after two reviews, scheduled for November and February. This infusion of funds will greatly enhance Pakistan’s foreign exchange reserves, leading to a substantial increase of $4.2 billion by the end of this week.
IMF Support Amidst Economic Challenges
The approval of the 9-month SBA by the IMF’s Executive Board comes at a crucial time for Pakistan’s economy. The country has been grappling with a difficult external environment, devastating floods, and policy missteps, resulting in large fiscal and external deficits, rising inflation, and depleted reserve buffers in FY23, according to the IMF’s statement.
