Blinken welcomes Pakistan-IMF deal

Urges Pakistan to continue working with IMF toward macroeconomic reforms, sustainable economic recovery

US Secretary of State Antony Blinken has welcomed the International Monetary Fund's approval of a programme to support Pakistan, saying he stood by the Pakistani people during these hard times.

“We urge Pakistan to continue working with IMF toward macroeconomic reforms and sustainable economic recovery,” he said on microblogging website, Twitter, on Thursday.

We stand by the Pakistani people during these hard times and welcome the International Monetary Fund's approval of a program to support Pakistan. We urge Pakistan to continue working with @IMFNews toward macroeconomic reforms and sustainable economic recovery.

— Secretary Antony Blinken (@SecBlinken) July 13, 2023

Earlier in the day, Finance Minister Ishaq Dar had said that the IMF has transferred $1.2 billion to the State Bank of Pakistan (SBP).

Dar's statement comes a day after the IMF Executive Board approved a $3 billion bailout package to save Pakistan from default and put it back on the reforms path – a journey that Islamabad undertook only after friendly countries linked its support with the fund’s deal.

The Board approved a nine-month Stand-by Arrangement (SBA) in the amount of SDR2.25 billion or about $3 billion. The amount is equal to Pakistan’s 111% of the quota.

In a televised address today, the finance minister said that the global money lender has transferred the first installment to the central bank as part of the bailout package.

"The country will receive the remaining amount after two reviews - one in November and the other in February next year," he added.

The minister stressed that this funding is expected to significantly improve the country's reserves -- a much-needed change for the cash-strapped country that had reported foreign exchange reserves barely enough to cover a month's exports last week.

Read more: SBP receives $1.2b from IMF: Dar

"We expect that our foreign exchange reserves will be between $13 and $14 billion," following the release of the funds said Dar.

He also extended his gratitude towards his team and the premier for their unwavering support in pushing the IMF deal through.

Meanwhile, Prime Minister Shehbaz Sharif has expressed hope that the SBA will lend a helping hand to his government's "efforts to stabilise the economy and achieve macroeconomic stability".

"It bolsters Pakistan's economic position to overcome immediate- to medium-term economic challenges, giving [the] next government the fiscal space to chart the way forward," he said

Today, with the improved capital inflow -- thanks to the IMF as well as friendly countries -- the Pakistani currency improved by Rs2.14 to Rs275.34 against the US dollar in the interbank market.