ISLAMABAD: Pakistan’s central bank said on Friday it had received $1.0269 billion from the International Monetary Fund as the first tranche of a $7 billion bailout to stabilize the economy, two days after the global lender’s board approved the package.
The IMF’s board on Wednesday approved a long-awaited 37-month $7 billion bailout deal that will require “sound policies and reforms” to strengthen macroeconomic stability and address structural challenges alongside “continued strong financial support from Pakistan’s development and bilateral partners.”
“Following the approval of the IMF Executive Board of 37-month Extended Fund Facility amounting to $7 billion, SBP has received the first tranche of SDR 760 million (equivalent to USD 1026.9 million) from the IMF today [Friday],” the central bank said.
“These inflows will be reflected in SBP liquid reserves to be released on Thursday 03 Oct 2024.”
Pakistan has been struggling with boom-and-bust economic cycles for decades, leading to 22 IMF bailouts since 1958. Currently the country is the IMF’s fifth-largest debtor, owing the Fund $6.28 billion as of July 11, according to the lender’s data.
The latest economic crisis has been the most prolonged and has seen Pakistan facing its highest-ever inflation, pushing the country to the brink of a sovereign default last summer before a stop-gap last-minute IMF bailout.
Inflation has since eased and credit ratings agency Moody’s has upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to ‘Caa2’ from ‘Caa3’, citing improving macroeconomic conditions and moderately better government liquidity and external positions.
With inputs from Reuters
Pakistan receives $1.02 billion first tranche from new IMF bailout
https://arab.news/26cyd
Pakistan receives $1.02 billion first tranche from new IMF bailout
- IMF board on Wednesday approved a long-awaited $7 billion bailout deal
- First tranche to be reflected in SBP liquid reserves to be released on Oct. 3
Pakistan, global crypto exchange discuss modernizing digital payments, creating job prospects
- Pakistani officials, Binance team discuss coordination between Islamabad, local banks and global exchanges
- Pakistan has attempted to tap into growing crypto market to curb illicit transactions, improve oversight
ISLAMABAD: Pakistan’s finance officials and the team of a global cryptocurrency exchange on Friday held discussions aimed at modernizing the country’s digital payments system and building local talent pipelines to meet rising demand for blockchain and Web3 skills, the finance ministry said.
The development took place during a high-level meeting between Finance Minister Muhammad Aurangzeb, Pakistan Virtual Assets Regulatory Authority (PVARA) Chairman Bilal bin Saqib, domestic bank presidents and a Binance team led by Global CEO Richard Teng. The meeting was held to advance work on Pakistan’s National Digital Asset Framework, a regulatory setup to govern Pakistan’s digital assets.
Pakistan has been moving to regulate its fast-growing crypto and digital assets market by bringing virtual asset service providers (VASPs) under a formal licensing regime. Officials say the push is aimed at curbing illicit transactions, improving oversight, and encouraging innovation in blockchain-based financial services.
“Participants reviewed opportunities to modernize Pakistan’s digital payments landscape, noting that blockchain-based systems could significantly reduce costs from the country’s $38 billion annual remittance flows,” the finance ministry said in a statement.
“Discussions also emphasized building local talent pipelines to meet rising global demand for blockchain and Web3 skills, creating high-value employment prospects for Pakistani youth.”
Blockchain is a type of digital database that is shared, transparent and tamper-resistant. Instead of being stored on one computer, the data is kept on a distributed network of computers, making it very hard to alter or hack.
Web3 refers to the next generation of the Internet built using blockchain, focusing on giving users more control over their data, identity and digital assets rather than big tech companies controlling it.
Participants of the meeting also discussed sovereign debt tokenization, which is the process of converting a country’s debt such as government bonds, into digital tokens on a blockchain, the ministry said.
Aurangzeb called for close coordination between the government, domestic banks and global exchanges to modernize Pakistan’s payment landscape.
Participants of the meeting also discussed considering a “time-bound amnesty” to encourage users to move assets onto regulated platforms, stressing the need for stronger verifications and a risk-mitigation system.
Pakistan has attempted in recent months to tap into the country’s growing crypto market, crack down on money laundering and terror financing, and promote responsible innovation — a move analysts say could bring an estimated $25 billion in virtual assets into the tax net.
In September, Islamabad invited international crypto exchanges and other VASPs to apply for licenses to operate in the country, a step aimed at formalizing and regulating its fast-growing digital market.
