IMF, Pakistan reach staff-level agreement on final bailout review

Pakistan will get $1.1 billion following approval by the Fund’s Executive Board as part of a $3 billion bailout that has been agreed at the staff level.

The agreement acknowledges the caretaker government’s and the State Bank of Pakistan’s excellent program implementation in recent months, as well as the new government’s plans for continued policy and reform initiatives to transition Pakistan from stabilization to a robust and long-lasting recovery.

The Fund stated on its website, “We expect the review to be considered by the IMF’s Board in late April given the timing of the Second Review mission, immediately following the formation of the new cabinet.”

Shares at the Pakistan Stock Exchange (PSX) increased by 374 points after the announcement.

The IMF mission chief in Pakistan, Nathan Porter, and Finance Minister Muhammad Aurangzeb led their respective teams at the final, usual ending session one day earlier. IMF communication standards caused both sides to keep silent.

Read More: Oil retreats from multi-month highs, strong dollar dents demand

The nine-month agreement with Pakistan was authorized by the IMF Executive Board last year “to support its economic stabilization program.” $1.2 billion might be disbursed immediately under the decision, with the remaining funds to be phased in over the course of the program and subject to two quarterly reviews.

The much-anticipated $700 million tranche was released by the IMF in January, strengthening the foreign reserves of the State Bank of Pakistan (SBP) after an effective initial review by the IMF Executive Board under the terms of the agreement.

Read More: Yen close to a four-month low, Fed in forefront

In his first official media appearance, recently elected Finance Minister Aurangzeb Khan stated that the nation is now looking toward a “longer and larger” economic bailout plan with the IMF. A loan representative also reaffirmed that, should the incoming government request one, the IMF would assist in creating a new economic plan for the nation.

Then, the main ministerial sessions are set for April 17–19. In addition, there will be extra events and activities over the week of April 15–20. Pakistan has declared its intention to participate in the discussions, and the delegation would be led by the recently appointed finance minister.