Pakistan to get loan tranches from IMF this month
The International Monetary Fund (IMF) is likely to
approve multiple loan tranches for Pakistan this month, including funding under
the 37-month Extended Arrangement under the Extended Fund Facility (EFF) and
the Resilience and Sustainability Facility (RSF). The total financing under
these programs over 28 months is estimated to be around $1.3 billion.
The IMF Executive Board is expected to meet this
month to review Pakistan’s case. While the exact date has not been finalized, a
Ministry of Finance official confirmed that Pakistan could receive more than $1
billion under these two programs.
Read More Staff-level
agreement reached between Pakistan, IMF to unlock $1.3bn
The IMF recently reached a staff-level agreement
(SLA) with Pakistani authorities on the first review of the EFF and a new
28-month RSF arrangement. Upon approval by the IMF Executive Board, Pakistan
will gain access to about $1 billion (SDR 760 million) under the EFF, raising
total disbursements under this program to $2 billion. Additionally, Pakistan is
set to receive $1.3 billion under the RSF in multiple tranches over the next 28
months.
Impact on Foreign Reserves
The IMF loan tranches will contribute to
strengthening Pakistan’s foreign exchange reserves, which have been under
pressure due to external debt repayments. The State Bank of Pakistan’s (SBP)
reserves declined by $540 million, reaching $10.606 billion as of March 21,
2025. Meanwhile, total liquid foreign reserves stood at $15.55 billion, with $4.944
billion held by commercial banks.
Read More IMF
adjusts Pakistan's foreign loan requirement to $25 billion
Pakistan’s Borrowing and
Budgetary Needs
During the first eight months
(July-February) of the 2024-25 fiscal year, Pakistan secured approximately $6
billion from various financing sources. The government had projected $19.393
billion in external financing for FY 2024-25, including $19.216 billion in
loans and $176.29 million in grants. However, by April, the country had
received only 30% of the annual budgeted amount.
The approval of these IMF loan tranches is
expected to provide much-needed stability to Pakistan’s economy amid ongoing
fiscal challenges.
Source: The Nation