ISLAMABAD: The International Monetary Fund (IMF) has called its executive board meeting on April 16 to consider an extra loan of $1.4 billion for Pakistan to boost the country’s foreign exchange reserves and extend budgetary support in the wake of the economic slowdown due to the coronavirus pandemic.
The government had requested the IMF last month for a low-cost, fast-disbursing loan under the fund’s Rapid Financing Instrument (RFI) to deal with the adverse economic impact of COVID-19.
“We have been working with the Pakistani authorities since the request was placed. This $1.4 billion disbursement is scheduled to happen next week,” IMF Resident Representative in Pakistan Teresa Daban Sanchez said.
The RFI is used to provide financial assistance to IMF member countries facing an urgent balance of payments need without requiring them to put a full-fledged programme in place.
Sanchez said the IMF was working with the Ministry of Finance to make sure that Pakistan had “enough resources to navigate through this difficult time”.
The $1.4 billion loan to Pakistan is additional to the country’s $6 billion bailout package that it signed with the IMF in July last year to stave off a balance of payments crisis.
“Pakistani authorities remain committed to the policies and reforms outlined under the EFF-supported programme,” the IMF representative said.
Pakistan had already announced Rs1.2 trillion fiscal stimulus package to offset the adverse impacts of the COVID-19 pandemic on the country’s fragile economy.
The country also approached multilateral donors for additional funds to fight the coronavirus pandemic and its economic implications.
The World Bank had approved $1 billion and the Asian Development Bank $1.5 billion for Pakistan to keep its economy afloat.
With additional input from APP