Islamabad
The International Monetary Fund (IMF) has said that it had reached a staff-level agreement with Pakistan on the combined seventh and eighth reviews for a USD 6 billion Extended Fund Facility (EFF) loan facility.
The immediate priority is to stabilize the economy through the steadfast implementation of the recently approved budget for FY23, continued adherence to a market-determined exchange rate, and a proactive and prudent monetary policy, a statement issued by the IMF said.
It is important to expand social safety to protect the most vulnerable, and accelerate structural reforms including to improve the performance of state-owned enterprises (SOEs) and governance, it added.
The discussion was finalized by an IMF team led by Nathan Porter and the agreement is subject to approval by the IMF’s Executive Board.
About USD 1,177 million will become available, bringing total disbursements under the program to about USD 4.2 billion, Porter said through the statement.
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves.
Pakistan is at a challenging economic juncture. A difficult external environment combined with procyclical domestic policies fueled domestic demand to unsustainable levels. The resultant economic overheating led to large fiscal and external deficits in FY22, contributed to rising inflation, and eroded reserve buffers, it read.
The implementation of the outlined policies will help create the conditions for sustainable and more inclusive growth. The agreement with the Fund has set the stage to bring country out of economic difficulties, Prime Minister Sharif said as quoted by sources.
