SBP receives $1 billion IMF loan tranche

Disbursement comes after global lender revived Extended Fund Facility

KARACHI:

The State Bank of Pakistan (SBP) has received a loan installment of $1.053 billion from the International Monetary Fund (IMF) under the $6 billion Extended Fund Facility (EFF).

“Following the successful completion of sixth review of the IMF programme, SBP has received the next tranche of $1.053 billion,” the State Bank of Pakistan (SBP) stated on its official Twitter handle.

Talking to The Express Tribune, Ismail Iqbal Securities Head of Research Fahad Rauf said that the receipt of $1 billion loan tranche would benefit Pakistan in three ways.

Firstly, the payment will improve foreign exchange reserves of the country, he said.

Moreover, it will lend support to the balance of payments and ease pressure on the rupee, which may recover against the US dollar.

“Had the IMF not resumed its loan programme, uncertainty would have prevailed in the foreign exchange and stock markets,” he said.

The research head expected the two markets to stabilise following the revival of the programme.

The IMF executive board on Wednesday revived Pakistan’s $6 billion EFF, paving the way for disbursement of about $1 billion loan tranche.

It came after the Pakistan Tehreek-e-Insaf (PTI) government managed to get the State Bank of Pakistan (Amendment) Bill passed from the opposition-controlled Senate last week.

Sources told The Express Tribune that the IMF review largely remained smooth, adding that the Indian executive director, who represented a constituency of four countries, abstained from the meeting.

The executive board, which met in Washington, also waived some conditions necessary for the release of fourth loan tranche under the sixth review.

Published in The Express Tribune, February 5^th, 2022.

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