IMF Deposits $1.2 Billion in State Bank: Ishaq Dar

The International Monetary Fund (IMF) has deposited $1.2 billion in the State Bank of Pakistan (SBP). The central bank has received $1.2 billion first tranche from the IMF under the recently approved $3 billion Stand-by Arrangement (SBA) program, confirmed Finance Minister Ishaq Dar in a media briefing today. “Pakistan received an installment of $1.2 billion and the remaining $1.8 billion would be disbursed after two reviews, which will be held in November and February. This would boost foreign exchange reserves, and after this week’s closing on Friday, SBP reserves would show an increase of $4.2 billion this week,” he said. The IMF tranche, along with previous disbursements of $1 billion from the United Arab Emirates and $2 billion from the Kingdom of Saudi Arabia, will raise the SBP foreign exchange reserves in excess of $8.5 billion. The new forex level is expected to be reflected in next week’s central bank market update. This comes after the lender’s Executive Board on Wednesday approved a 9-month SBA for Pakistan for an amount of SDR2,250 million (about $3 billion, or 111 percent of quota) to support the authorities’ economic stabilization program. The arrangement comes at a challenging economic juncture for Pakistan. A difficult external environment, devastating floods, and policy missteps have led to large fiscal and external deficits, rising inflation, and eroded reserve buffers in FY23, the IMF said in its statement. Pakistan’s new SBA-supported program will provide a policy anchor for addressing domestic and external imbalances and a framework for financial support from multilateral and bilateral partners, it added. Today’s disbursement of $1.2 billion confirms the IMF Executive Board’s earlier announcement for the immediate credit of the first tranche in SBP. The remaining amount will be phased over the program’s duration, subject to two quarterly reviews over the 9-month period.