The International Monetary Fund (IMF) said that the recently-approved $3 billion loan program with Pakistan is aimed at supporting the country’s immediate effort to stabilize the economy and ensure the current balance of payments need is filled.
Earlier this week, the global lender’s executive board green-lit the nine-month standby arrangement (SBA) in order “to support the authorities’ economic stabilization program”.
The Stand-By Arrangement (SBA) for Pakistan ???????? comes at a challenging juncture. It aims to stabilize the economy & address the needs of the Pakistani people. Steadfast implementation is critical to address its large financing needs & support the most vulnerable. pic.twitter.com/2BfDQxvih2
— Julie Kozack (@IMFSpokesperson) July 13, 2023
The IMF said in a statement that the board had approved a bailout package for Pakistan worth $2.25 billion in Special Drawing Rights (SDRs), or roughly $3 billion, or 111% of Pakistan’s quota. SDRs are reserve funds that the institution credits to the accounts of its member countries.
In a press briefing on Thursday, Julie Kozack, the IMF’s Director of Strategic Communications (COM), said that while it is relatively a short program, the nine-month SBA “provides time for Pakistan to implement policies critical to strengthening its domestic and external economic situation, thereby supporting sustainability”.
“Resolving Pakistan’s structural challenges will likely require continued reforms over the medium term to underpin the needed economic transformations, to strengthen inclusive growth prospects, and create an environment conducive to renewed private capital inflows,” Kozack responded when asked by a journalist if the nine-month SBA would be enough to get Pakistan out of its current economic turmoil.
Kozack reiterated that the the IMF stands “ready to work with Pakistan and its government on efforts to restore sustainability and an economic stability”.
However, the senior IMF official also warned that policy implementation would remain key to the SBA’s success.
“Steadfast policy implementation is critical in the period ahead. This will be critical for success of the programme and, of course, ultimately, to aid and support the people of Pakistan.”
The spokesperson also assured that the IMF was always standing ready to work with the country and the government in efforts to restore sustainability and economic stability.
