ISLAMABAD:
International Monetary Fund on Monday revived Pakistan’s program and its board approved a $1.16 billion loan, ending months of uncertainty that has intensified in in past three days due to Pakistani Tehreek-e-Insaf maneuvers.
global creditor also approved an increase in the size of the loan to approximately $7 billion and extended this is until June 2023.
All Executive Directors supported Pakistan’s request for approval and extension of the loan, with the exception of India, which abstained from voting. board participants raised questions over appeal of commitments made by Pakistan in February of this year but recognized as politically difficult steps that Pakistan took revive the program.
Council approved the completion of combined 7th and 8th review under EFF and release of tranche of SDR 894 million or $1.16 billion according to Pakistani officials.
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Council has also approved the extension of program until the end of June 2023 and expansion of access by 720 million SDRs or US$930 million. The expansion increased the size of the program to SDR 4.988 billion, equivalent to 245.6 percent. of quota of Pakistan.
The IMF Board expressed condolences and sympathy with Pakistani authorities over tragic loss of life and livelihood caused floods in countries, according to sources. board appreciated that the Pakistani government made attempts to put the program back on monitor and confirm commitment to program policies and objectives.
In accordance with the commitment, Pakistan will have to show elementary budget excess target of Rs 153 billion or 0.2% of GDP until it is mutually revised in consultation with IMF staff.
Sources said the executive directors representing the UAE, Saudi Arabia and Qatar also pledged additional funding to Pakistan as agreed between Islamabad and IMF staff.
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Previous government of Pakistani Tehreek-e-Insaf (PTI) signed 39-month EFF in July 2019 aims to prevent default on foreign payment obligations. However, the country remained in turmoil and despite the remaining in program of the IMF, its foreign exchange reserves remained small amid increased external debt-related vulnerabilities.
Due to a faulty EFF design program, unrealistic goals and lack of of political commitment to realizing what former Prime Minister and head of PTI Imran Khan himself agreed, the program remained suspended for almost two years out of three years.
