KARACHI: Pakistan received proceeds of $1.16 billion from the International Monetary Fund two days after the executive board of the global lending agency decided to revive a bailout program for the South Asian nation facing significant economic challenges, the State Bank of Pakistan (SBP) confirmed late Wednesday night.
The IMF executive board endorsed a staff-level agreement with Pakistan on Monday which was reached after the completion of seventh and eighth reviews under the Extended Fund Facility amounting to $6.5 billion.
Pakistan entered the IMF program in 2019 which was spread over three years and three months. However, with less than half the amount disbursed, the global lender suspended the bailout earlier this year after Imran Khan, the previous prime minister, announced unfunded subsidies for the oil and power sectors.
Khan’s government was ousted in April. The new government has since raised prices of petroleum products several times to meet IMF conditions.
“Today, #SBP has received proceeds of USD 1.16 billion (equivalent of SDR 894 million) after the IMF Executive Board completed the combined seventh and Eight review under the Extended Fund Facility (EFF) for Pakistan,” the central bank said in a Twitter post.
Pakistan’s central bank said the IMF tranche would help improve the country’s foreign currency reserves and facilitate other planned inflows from multilateral and bilateral sources.
The revival of the loan program and release of the tranche comes at a time when Pakistan is witnessing its worst floods triggered by torrential monsoon rains which have killed nearly 1,200 people, affected over 33 million, and destroyed large swathes of farmland and infrastructure.
