Pakistan receives $700 million second tranche from IMF bailout

Cash-strapped Pakistan on Wednesday received over USD 700 million second tranche from the International Monetary Fund (IMF) under an existing USD 3 billion bailout package. The loan was part of a USD 3 billion bailout package agreed towards June last year when Pakistan was slowly drifting towards default. Cash-strapped Pakistan’s economy has been in a free fall mode for the last many years, bringing untold pressure on the poor masses in the form of unchecked inflation, making it almost impossible for a vast number of people to make ends meet. Elections in the politically and economically troubled country have been scheduled for Feb. 8 after several delays. The South Asian country is operating under a caretaker government and the IMF loan programme, approved in July, helped avert a sovereign debt default. An IMF mission led by Pakistan mission chief Nathan Porter concluded its visit in November. It reviewed whether Pakistan was on track to meet benchmarks set under the SBA agreed in July and signed a staff level agreement. The State Bank of Pakistan (SBP) confirmed in a statement that it has received SDR 528 million (equivalent to $705.6 million) in value 16th January 2024 from IMF following successful completion of the first review by the Executive Board of IMF under Stand By Arrangement (SBA)." It further said that the disbursement will be reflected in SBP reserves for the week ending on January 19, 2024. The handing over of around $700 million brings the total disbursements under the SBA with the IMF to $1.9 billion, while another $1.1 billion will be provided in April as the two sides are set to complete the nine-month program. The reimbursement by the IMF comes after the UAE also confirmed the rollover of its two deposits of $1 billion each placed with SBP for another year. The period of deposit was maturing in January 2024. Pakistan has avoided potential default with the help from the international donors and friendly countries but its economy is still under clouds. It is believed that another IMF program would be needed at the completion of the ongoing package. The country’s economy has been in a free fall mode for the last many years, bringing untold pressure on the poor masses in the form of unchecked inflation, making it almost impossible for a vast number of people to make ends meet. With inputs from agencies.