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SBP Boosts Reserves as Pakistan Receives $700 Million from IMF

$700 Million

The State Bank of Pakistan (SBP) has confirmed the receipt of the second tranche of Special Drawing Rights (SDR) amounting to SDR 528 million, equivalent to $705.6 million, from the International Monetary Fund (IMF). This injection of funds will be reflected in the SBP reserves, contributing to financial stability for the week ending on January 19, 2024.

The disbursement is part of the Stand-By Arrangement (SBA), with the total disbursed amount now reaching $1.9 billion. The remaining $1.1 billion is anticipated to be received following another review scheduled for February 2024.

As of January 5, 2024, the SBP’s total reserves were reported at $8.15 billion. It is noteworthy that Pakistan secured a $3 billion SBA from the IMF towards the end of the fiscal year 2023, which played a crucial role in averting a sovereign debt default in the cash-strapped nation.

The IMF’s disbursement plan involved an initial $1.2 billion, with the remaining amount disbursed in two installments subject to reviews. The successful completion of the first review of Pakistan’s economic reform program on January 11, 2024, marked a significant milestone. Following the approval by the IMF board, it was noted that economic activity in Pakistan had stabilized, although challenges persist, contingent on the implementation of sound policies.

The broader objective of Pakistan’s 9-month SBA is to serve as a policy anchor, addressing both domestic and external balances while providing a framework for financial support from multilateral and bilateral partners. The ongoing collaboration with the IMF reflects the nation’s commitment to implementing robust economic reforms for sustained stability and growth.

The State Bank of Pakistan (SBP) acknowledges receipt of the second IMF installment: $700 million, reinforcing reserves and economic stability.

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