April 11, 2020: Resident Representative of International Monetery Funds (IMF) in Pakistan Ms. Maria Teresa Daban Sanchez has said that Pakistan would receive $ 1.4 billion through Rapid Financing Instrument (RFI) from the fund to support the country by coming week in current challenging situation of COVID-19 coronavirus pandemic.
Pakistan had demanded the package of $ 1.4 billion from IMF on which both sides were continuing negotiation to support these efforts and ensured prompt and adequate relief to the people and the economy, Maria Teresa Daban told APP.
She said, this emergency financing would allow the government to address additional and urgent balance of payments needs and support policies that would make it possible to direct funds swiftly to Pakistan’s most affected sectors, including social protection, daily wage earners, and the healthcare system.
“Our team is working expeditiously to respond to this request so that a proposal can be considered by the IMF’s Executive Board as soon as possible” she added.
Replying to a question, she said that to support these efforts and ensure prompt and adequate relief to the people and the economy, the government of Pakistan had requested financial assistance under the Fund’s Rapid Financing Instrument (RFI).
She said that Mozambique and Ecuador had already availed the facility for supporting their social safety program.
“The Fund stands ready to continue to support the authorities’ efforts to implement much-needed economic and structural reforms aimed at fostering strong and sustainable growth,” Maria Teresa added.
Replying to another question, she said that the IMF had also postponed the second review of its $ 6 billion bailout package for Pakistan scheduled in previous week.
The International Monetary Fund Executive board approved a three-year, USD 6 billion loan package for Pakistan in July last year to rein in mounting debts and stave off a looming balance of payments crisis, in exchange for tough austerity measures.
She said the RFI was available to all member countries, although PRGT-eligible member countries were more likely to use the similar concessional Rapid Credit Facility (RCF).
The RFI is designed for situations where a full-fledged economic program is either not necessary nor feasible.
The former situation may arise when the shock is transitory and limited in nature, while the latter may arise when the member’s policy design or implementation capacity is limited, including due to the urgent nature of the balance of payments need or to fragilities, she concluded.