SBP receives $1.1bn IMF tranche a day after approval
Business
This is the third and last tranche of the $3 billion SBA with the IMF
KARACHI (Dunya News) - The State Bank of Pakistan (SBP) has received SDR 828 million (around $1.1 billion) from the International Monetary Fund (IMF) a day after the Fund approved the last tranche for Pakistan under the $3 billion Stand-By Arrangement (SBA).
In a statement on Tuesday, the SBP said the amount would reflect in the foreign exchange reserves for the week ending on May 3.
Last week, the SBP said its foreign exchange reserves dropped by $74 million to $7.981 billion (in the week ending on April 19) because of external debt repayments.
The reserves of commercial banks also decreased by $20 million to $5.299 billion, says the SBP.
IMF greenlights $1.1bn tranche
The International Monetary Fund (IMF) on Monday approved disbursement of $1.1 billion tranche, concluding the second bailout package in eight years.
However, this successful completion has come at a steep cost, resulting in severe inflation and a decelerating economy.
The board met in Washington and completed the second review. It is learnt that all board members, except India, favoured the last installment for Pakistan.
Earlier, sources said Pakistan was expected to receive the loan payment later this week. This payment will be the third and final installment of a $3 billion Stand-By Arrangement (SBA) with the IMF, which was agreed upon last summer to prevent a sovereign default and is set to expire this month.
The development follows a meeting between Prime Minister Shehbaz Sharif and IMF Managing Director Kristalina Georgieva in Riyadh on Sunday.
In his first meeting with the IMF chief since being re-elected, PM Shehbaz discussed the possibility of Pakistan entering a new programme with the IMF.
Pakistan is now hoping for a bigger loan programme worth $6bn to $8bn spanning over three to four years, as an IMF team is expected to arrive in Islamabad some time next month to discuss the terms and conditions.
It is not just the Extended Fund Facility (EFF), with Pakistan also aiming at getting additional funding under climate financing – a request yet to be approved but will be deliberated upon during the upcoming talks.
