IMF's Executive Board to consider Pakistan's case for $700M tranche

The International Monetary Fund (IMF) has confirmed its Executive Board would consider Pakistan’s request for completion of the first review and release of the second tranche worth $700 million on January 11 in Washington, Report informs via GeoTV.

A Letter of Intent (LoI) has been signed by caretaker Minister for Finance Dr Shamshad Akhtar and State Bank of Pakistan (SBP) Governor Jameel Ahmad in which they committed with the Lender to execute all conditions that have been agreed upon to get the approval of the second tranche worth $700 million under the $3 billion Standby Arrangement (SBA).

Pakistani authorities reiterated the government would leave no stone unturned to ensure fiscal consolidation to accomplish the objectives of the programme. They vowed to pursue the market-based exchange rate mechanism.

“Yes, Pakistani authorities have signed LoI and dispatched to the fund’s headquarters. Now the signed LoI has been shared with the Board of Directors (BoD) of the IMF and they will consider Pakistan’s request to grant their assent for release of second tranche worth $700 million within the next few days after the board’s meeting,” top official sources confirmed while talking to The News on Monday.

There were Christmas and New Year holidays in the US and soon after the IMF’s board calendar was issued according to which the fund’s board was scheduled to meet on January 11 to take up Pakistan’s request for the release of the second tranche under the SBA programme.

In November 2023, Pakistan reached a staff-level agreement with the IMF under the $3 billion SBA and had been awaiting the board’s approval to receive a second tranche.

The ongoing SBA programme is going to expire on April 14, 2024.

In December 2023, IMF Executive Director Bahador Bijani noted an overall improvement in the country’s economic situation, saying, the “Pakistani authorities have delivered”.

He had made these remarks at an event hosted by Pakistan’s ambassador to the US in honour of friends of Pakistan from International Financial Institutions including IMF, International Finance Corporation (IFC), World Bank (WB), and Multilateral Investment Guarantee Agency (MIGA), at Pakistan House in Washington.

“I think the future for Pakistan is very bright. Pakistan is not just any country. It's one of the most important countries in the region and in the world. Pakistanis deserve much more,” the IMF executive director was quoted as saying in an official statement.

Nathan Porter, IMF Mission Chief to Pakistan, had also expressed satisfaction over the recently concluded staff-level agreement. He had said that the actions and policies of the current government reflected its commitment to steer the country towards stabilisation.

Pakistan is reeling from Asia’s fastest inflation, has about $1 billion in dollar-denominated debt due this year and is scheduled to hold elections in February.