IMF board approves $7bn Extended Fund Facility for Pakistan

September 26, 2024 (MLN): Pakistan has secured final approval to start a $7 billion loan programme from the International Monetary Fund, Bloomberg News reported on Wednesday.

The IMF executive board on Wednesday approved a program for the nation, Bloomberg quoted a statement from the prime minister’s office. The IMF has yet to make an official statement.

The move allows for an immediate disbursement of about $1.1bn, Pakistan State Bank governor Jameel Ahmad told reporters earlier on Wednesday.

The deal, announced in July, was pending board approval. The Washington-based lender didn’t immediately reply to a Bloomberg message seeking comment.

Pakistan has been relying on IMF aid to keep up with its debt obligations after suffering a dollar shortage that brought the South Asian nation to the brink of an economic collapse.

The nation faces about $26bn in loan repayments in the fiscal year started July.

The program starts after a delay with Pakistan initially expecting to secure a deal with the IMF in August.

The nation raised its tax revenue goal by a record 40% and increased energy prices to meet demands set by the IMF. 

Pakistan secured an upgrade from Moody’s Ratings in late August and Fitch Ratings in July.

The IMF program brings certainty over Pakistan’s sources of financing to meet its needs over the next two to three years, Moody’s said.

Copyright Mettis Link News