Pakistan Secures $1.1 Billion from IMF, Seeks New Loan Program
The International Monetary Fund (IMF) has approved $1.1 billion in funding for Pakistan, marking the second and final tranche of a $3 billion standby arrangement. This approval comes amidst discussions for a new loan program between Pakistan and the IMF.
The current standby arrangement, secured by Islamabad last summer, aimed to help the country avert a sovereign default. The approval for the final tranche follows a meeting between Pakistani Prime Minister Shehbaz Sharif and IMF Managing Director Kristalina Georgieva at the World Economic Forum in Riyadh.
Pakistan is now seeking a new, larger Extended Fund Facility (EFF) agreement with the IMF. This new program is expected to be long-term, spanning at least three years, and will focus on achieving macroeconomic stability and implementing structural reforms.
Finance Minister Muhammad Aurangzeb has stated that Pakistan could reach a staff-level agreement on the new program by early July. However, the amount of the loan being sought remains undisclosed.
This potential 24th IMF bailout for Pakistan comes at a crucial time. The country faces a severe balance of payments crisis, with significant debt and interest repayments due in the coming fiscal year. The IMF's support is crucial for Pakistan to stabilize its economy and implement necessary reforms.