Pakistan receives $1.02 billion from IMF to boost foreign exchange reserves
Pakistan has received $1.026 billion from the International Monetary Fund
(IMF), a move that will bolster the country’s foreign exchange reserves.
The State Bank of Pakistan announced that this inflow follows the approval
of a 37-month Extended Fund Facility (EFF) worth $7 billion by the IMF
Executive Board. The first tranche, amounting to SDR 760 million (approximately
$1.026 billion), was received on Friday.
As a result, the country’s total liquid foreign reserves stood at $14.87
billion as of September 20, 2024. This includes $9.53 billion held by the State
Bank and $5.34 billion held by commercial banks.
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adjusts Pakistan's foreign loan requirement to $25 billion
According to the IMF, Pakistan has made significant strides toward restoring
economic stability through consistent policy implementation under the 2023-24
Stand-by Arrangement (SBA). Economic growth has rebounded to 2.4 percent in
FY24, driven by activity in the agriculture sector, while inflation has
decreased to single digits due to tight fiscal and monetary policies. Improved
conditions in the current account and a stable foreign exchange market have
facilitated the rebuilding of reserve buffers. Reflecting these positive
changes, the State Bank has reduced the policy rate by 450 basis points since
June, supported by a disciplined FY25 budget.
However, challenges remain. Pakistan continues to face structural
vulnerabilities, a challenging business environment, and limited governance,
which hinder investment. The narrow tax base poses difficulties for ensuring
fiscal sustainability and addressing significant social and development needs,
particularly in health and education.
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Board greenlights Pakistan's initial review, clearing the way for $700 million
disbursement
To tackle persistent poverty and inadequate infrastructure, the government
recognizes the need for concerted reforms and adjustments. Moving forward,
authorities are committed to addressing these challenges to build resilience
and enable sustainable growth.
Source: The Nation