Much awaited Executive Board meeting of the International Monetary Fund (IMF) for the combined seventh and eighth review under the Extended Fund Facility (EFF) has been set for August 29.
According to the IMF’s representative in Islamabad, the IMF’s executive board will meet on August 29 to approve a $1.17 billion tranche for Pakistan. The meeting will approve the seventh and eighth reviews.
The disbursement of a $1.17 billion tranche will ease the country’s situation as the State Bank of Pakistan (SBP) now only holds $7.8 billion in foreign currency reserves, necessitating the renewal of the IMF programme to fill the gap in external finance.
Last couple of months have been extremely challenging for Pakistan as it faced numerous political and economic problems like record high inflation, massive currency depreciation, dwindling foreign exchange reserves and power crisis.
Revival of the IMF loan programme is the need of Pakistan in short run to save the economy from default. However, the loan never comes with ease, the government has taken strict measures in order to fulfill preconditions set by the global lender.
The IMF team has reached a staff-level agreement (SLA) with the Pakistan authorities for the conclusion of the combined seventh and eighth reviews of the EFF-supported program. The agreement is subject to approval by the IMF’s Executive Board. Subject to Board approval, about $1,177 million (SDR 894 million) will become available, bringing total disbursements under the program to about $4.2 billion.
Additionally, in order to support program implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the IMF Board will consider an extension of the EFF until end-June 2023 and an augmentation of access by SDR 720 million that will bring the total access under the EFF to about US$7 billion.