IMF Board Approves $3B Stand-By Arrangement For Pakistan

IMF Board Approves $3B Stand-By Arrangement For Pakistan
The Executive Board of the International Monetary Fund (IMF) on Wednesday approved a $3 billion standby arrangement for Pakistan.

The announcement came after Pakistan and IMF had reached a staff-level agreement over the arrangement in recent weeks. Curiously, while there was a statement posted on the IMF website and its headline was visible, attempts to open the statement failed.

IMF had approved a plan by Pakistan's finance ministry to address a funding gap worth $2.8 billion.

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Pakistan had told the IMF that it would be able to secure $2 billion from Saudi Arabia and another billion from other sources.

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On June 29, Pakistan and IMF announced an agreement on the standby arrangement as the Extended Fund Facility (EFF) worth $8 billion expired without being completed with the Fund withholding the last two tranches.

The standby arrangement makes it the 23rd bailout Pakistan has sought from the Fund in its 75-year history.

Arrangement to stabilise economy

Shortly after the announcement, Prime Minister Shehbaz Sharif issued a short statement on the microblogging website Twitter, stating that the arrangement was a "major step forward in the government's efforts to stabilise the economy and achieve macroeconomic stability".

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"It bolsters Pakistan's economic position to overcome immediate- to medium-term economic challenges, giving next government the fiscal space to chart the way forward," he said in a statement that also spoke volumes about Pakistan's economy as it did about the upcoming elections.

"This milestone, which was achieved against the heaviest of odds & against seemingly impossible deadline, could not have been possible without excellent team effort," he said as he commended Finance Minister Ishaq Dar and his team at the Finance Ministry for their efforts. He also thanked IMF Managing Director Kristalina Georgieva and her team for their support and cooperation.