IMF board to finalise $1.1b disbursement on Monday

Funding is last tranche of $3b standby arrangement which was secured last summer and which runs out this month


Reuters April 24, 2024
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, US, September 4, 2018. PHOTO: REUTERS

KARACHI:

The executive board of the International Monetary Fund (IMF) will meet on April 29 to discuss the approval of $1.1 billion funding for Pakistan, the fund said on Wednesday.

The funding is the second and last tranche of a $3 billion standby arrangement with the IMF, which was secured last summer to avert a sovereign default and which runs out this month.

The country is seeking a new long-term, larger IMF loan. Finance Minister Muhammad Aurangzeb has said Islamabad could secure a staff-level agreement on the new programme by early July.

Islamabad says it is seeking a loan over at least three years to help macroeconomic stability and execute a long-due and painful structural reforms, though Aurangzeb has declined to detail what size of programme the country seeks.

Read also: Aurangzeb foresees $10b reserves with IMF nod

Islamabad is yet to make a formal request, but the Fund and the government are already in discussions.

If secured, it would be the 24th IMF bailout for Pakistan.

The $350 billion economy faces a chronic balance of payment crisis, with nearly $24 billion to repay in debt and interest over the next fiscal year - three-time more than the central bank's foreign currency reserves.

The finance ministry expect the economy to grow by 2.6% in the current fiscal year ending June, while average inflation is projected to stand at 24%, down from 29.2% in fiscal year 2023/2024. Inflation soared to a record high of 38% last May.

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