The International Monetary Fund (IMF) released over $1.1 billion to Pakistan’s cash-strapped economy, the fund and the government said on Monday, according to Reuters.
The fund release is part of the regulator’s seventh and eighth reviews of the country’s bailout programme.
The IMF has extended the programme by a year until June 2023, with an increase in total funding to $940 million as per the current exchange.
Pakistan’s foreign exchange reserves dropped to levels that cover only a month of exports and its economy is “wrangled with a massive current account deficit and high inflation,” Reuters reported.
The fund announced the approval and the amount to be disbursed hours after Finance Minister Miftah Ismail had broken the news via Twitter.
Ismail expressed gratitude to China, Saudi Arabia, Qatar and UAE for helping the country “fulfil the financing gap that revived” the country’s IMF programme in another tweet.
“The go-ahead from the IMF board will open other multilateral and bilateral avenues of funding for Pakistan, which were awaiting a clean bill of health from the lender,” and will also be a “lifeline” for the country as it continues to be affected by floods, Reuters said.
The on-going floods have inflicted damage of at least $10 billion according to the country’s planning minister.
However, the floods were not mentioned in the fund’s statement.
“Adhering to scheduled increases in fuel levies and energy tariffs is essential as Pakistan’s economy has been buffeted by adverse external conditions,” IMF deputy managing director Antoinette Sayeh said in a statement.
Sayeh added these conditions include “spillovers from the war in Ukraine, and domestic challenges, including from accommodative policies that resulted in uneven and unbalanced growth,” according to Reuters.
Pakistan’s request for waivers related to the country’s failure to meet some of the programme’s criteria were also approved by the fund.
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