The International Monetary Fund (IMF) has announced its ability to reach a crucial staff-level agreement with the Pakistan on Wednesday, paving the way for the disbursement of $1.1 billion to bolster the debt-ridden South Asian economy.
This agreement signifies the final tranche of a vital rescue package that Pakistan secured last summer, effectively averting a sovereign debt default that loomed large over the nation.
The IMF mission, during a comprehensive five-day visit to Islamabad, engaged in intensive discussions with Pakistani officials to review the fiscal consolidation benchmarks set forth as part of the loan agreement.
The culmination of these deliberations occurred late on Tuesday with the successful conclusion of the review talks.
In an official statement, the IMF affirmed, “The IMF team has reached a staff-level agreement with the Pakistani authorities on the second and final review of Pakistan’s stabilization program supported by the IMF’s US$3 billion (SDR2,250 million) SBA approved in January 2024.”
However, the agreement remains contingent upon approval by the IMF’s Executive Board.
Once approved, the remaining access under the Stand-By Arrangement (SBA), amounting to $1.1 billion (SDR 828 million), will be made available to Pakistan.
The successful negotiation of this agreement underscores Pakistan’s commitment to implementing necessary economic reforms and adhering to the conditions set forth by the IMF.
The disbursement of these funds is expected to provide much-needed liquidity and stability to the Pakistani economy, enabling the government to address pressing financial challenges and promote sustainable growth.
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