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Saturday May 18, 2024

Forex reserves get major boost as Pakistan receives $1.1bn IMF tranche

SBP says amount will be reflected in its reserves for week ending on May 3

By Business Desk
April 30, 2024
A currency dealer counts US dollar notes at an exchange in Karachi on May 19, 2022. — AFP/File
A currency dealer counts US dollar notes at an exchange in Karachi on May 19, 2022. — AFP/File

Pakistan's foreign exchange reserves got a major boost as the State Bank of Pakistan (SBP) on Tuesday confirmed receiving $1.1 billion from the International Monetary Fund (IMF) a day after the global lender approved the last tranche of Pakistan under the $3 billion Stand-By Arrangement (SBA).

In an official statement, the central bank said the amount would be reflected in the SBP’s foreign exchange reserves for the week ending on May 3, 2024.

Last week, the SBP said its foreign exchange reserves dropped by $74 million to $7.981 billion in the week ending on April 19 because of external debt repayments.

The country’s foreign reserves fell by $93 million to $13.281 billion. The reserves of commercial banks also decreased by $20 million to $5.299 billion, as per the SBP.

An official statement issued by the IMF late Monday said the executive board completed the second and final review of Pakistan’s economic reform programme supported by the SBA.

"The board’s decision allows for an immediate disbursement of SDR 828 million (around $1.1 billion), bringing total disbursements under the arrangement to SDR 2.250 billion (about $3 billion)."

This was the third and last tranche of a $3 billion SBA with the IMF, which Pakistan secured last summer to avert a sovereign default.

The IMF — Washington-based lender — said the 9-month SBA, approved by the executive board on July 12, 2023, successfully provided a policy anchor to address domestic and external imbalances as well as a framework for financial support from multilateral and bilateral partners.