KARACHI: Pakistan has received the much-awaited first tranche of $991.4 million (SDR 716 million) from the International Monetary Fund (IMF) on Tuesday.
IMF executive board formally had approved a 39-month-long extended fund facility (EFF) worth $6 billion for Islamabad last Wednesday (July 3).
The Pakistan Tehreek-e-Insaf (PTI) government approached the international financial institution for the long-term loan programme soon after coming into power, in the aftermath of July 2018 general elections.
The aim of acquiring the loan was to finance deficit part of import payments and partially payoff the previous foreign loans.
The two sides consumed almost an entire year to agree on conditions laid down to acquire the loan.
During the year, weeks-long staff level talks between IMF and Islamabad ended inconclusive a couple of times as the latter found conditions tough for the loan presented by the former.
The government is expected to further increase power tariff in August under the tough conditions that the PTI economic team, reshuffled in April 2019, finally agreed on for the must loan.
Adviser to PM on Finance Dr Abdul Hafeez Shaikh, who joined the economic team in April, said the other day the entrance into the IMF programme has sent strong message to the world community and foreign investors globally that the country is committed to implement financial and monetary disciplines. This would help the country to raise additional financing from other institutions like the World Bank and Asian Development Bank (ADB).
IMF has estimated total inflows in Pakistan at around $30 billion from multilateral and bilateral donors and trade partners against the country’s need for $25.5 billion in the fiscal year started on July 1, 2019.
The inflows of over the requirement at around $4.5 billion would help building the country’s foreign currency reserves during the year.