ISLAMABAD: Pakistan Prime Minister Shehbaz Sharif makes a telephone call to Sri Lanka President Ranil Wickremesinghe. In gratitude for supporting and helping Pakistan with the finalization of the IMF agreement.
Official reports reveal that he also discusses the current pertaining situation and increasing economic concerns. The premier thanked Ranil for contributing his major role in the promotion of true friendship. It shows that Sri Lanka is a well-wisher and a close friend of Pakistan.
He also said that Sri Lanka is one of the countries promoting regional peace in the South Asian region. Our PM is conveying his appreciation on behalf of his country’s people. He also hopes both countries in the near future swiftly overcome their economic challenges.
On the other hand, Sri Lankan president also expressed congratulation to the prime minister of Pakistan on the staff-level agreement reached with the IMF. He also expressed his gratitude for the good wishes extended to his country.
Wickremesinghe also praised Sharif for his struggle and efforts in guiding Pakistan through its difficult economic position. The Sri Lankan president stressed the significance of IMF support to help Pakistan avoid a similar situation. Having personally experienced the challenges brought on by default.
IMF Board Approves $3 Billion
The arrangement comes at a challenging economic juncture for Pakistan. A difficult external environment, devastating floods, and policy missteps have led to large fiscal and external deficits, rising inflation, and eroded reserve buffers in FY23.
Pakistan’s new SBA-supported program will provide a policy anchor for addressing domestic and external imbalances and a framework for financial support from multilateral and bilateral partners. The program will focus on (1) the implementation of the FY24 budget to facilitate Pakistan’s needed fiscal adjustment and ensure debt sustainability while protecting critical social spending; (2) a return to a market-determined exchange rate and proper FX market functioning to absorb external shocks and eliminate FX shortages; (3) an appropriately tight monetary policy aimed at disinflation; and (4) further progress on structural reforms, particularly with regard to energy sector viability, SOE governance, and climate resilience.
The Executive Board’s approval allows for an immediate disbursement of SDR894 million (or about US$1.2 billion). The remaining amount will be phased over the program’s duration, subject to two quarterly reviews.
After the IMF board’s approval, Pakistan would receive a $1.2 billion tranche from the IMF in the next few days. The IMF has referred the SBA with Pakistan to the board after signing a staff-level agreement a few days ago.
