KARACHI: Pakistan is going to receive an extra $5.6 billion in financing following the approval of a loan from the International Monetary Fund (IMF).
This development is consider crucial for the South Asian country as it helps prevent a default and strengthens its foreign-exchange reserves.
According to Nathan Porter, the IMF’s mission chief for Pakistan, the recently secures funding comprises commitments of $3.7 billion from bilateral partners, including Saudi Arabia and the United Arab Emirates. Porter mentioned in an email response to Bloomberg News that $3 billion has already been disbursed as part of the funding package.
After a significant delay, the IMF executive board finally approved a $3 billion bailout loan program, providing financial stability for Pakistan ahead of the upcoming elections.
Prime Minister Shehbaz Sharif played a crucial role in finalizing the agreement through extensive phone calls and meetings with IMF Managing Director Kristalina Georgieva. This loan program not only addresses Pakistan’s funding gap but also includes an additional $400 million compared to the previous program.
The country has already witness inflows of approximately $4.2 billion, which is expected to nearly double its reserves. Further inflows are anticipated from multilateral development partners such as the World Bank, Asian Infrastructure Investment Bank, and Islamic Development Bank in the following weeks and months.
The improved financial situation will facilitate a smoother transition into the upcoming elections, with Prime Minister Sharif planning to hand over power to a caretaker government next month. The IMF loan has surpassed expectations and is seen as a crucial factor in providing stability to Pakistan during this period of political transition.
The country’s assets, including bonds and stocks, have experienced a notable rally, with bond prices surging by 40 percent in the past month, making Pakistan one of the top-performing markets globally.
