Pakistan receives IMF's second tranche of $454 million

ISLAMABAD: Pakistan on Thursday received from the International Monetary Fund (IMF) its second tranche of the $6-billion Extended Fund Facility (EFF), Geo News reported.

The sum, worth $454 million in total, is expected to be added to the Pakistan's foreign exchange reserves by next week; the reserves currently stand at $17.6 billion. The State Bank of Pakistan's (SBP) reserves, on the other hand, stood at $10.9 billion, while other banks' aggregated to $6.7 billion

Last Friday, the IMF had approved the second tranche to the country, saying that the country's programme was on track and had started to bear fruit. However, it had warned that the risks remained.

The approval came from the IMF's Executive Board, which had made its decision after completing the first review of Pakistan’s economic performance.

Strong ownership, reform implementation 'critical'

The organisation's first deputy managing director and acting chair, David Lipton, had said at the time: "Strong ownership and steadfast reform implementation are critical to entrench macroeconomic stability and support robust and balanced growth."

Also read: IMF approves $452m second tranche to Pakistan

Noting the authorities' commitment to "sustaining the progress", Lipton added: "The planned reforms include strengthening tax revenue mobilisation, including the elimination of tax exemptions and loopholes, and prudent expenditure policies. Preparations for a comprehensive tax policy reform should start early to ensure timely implementation."

He had added that the ongoing monetary stance was "appropriately tight" and should only be eased once disinflation is firmly entrenched.

"Strengthening the State Bank of Pakistan’s autonomy and governance will support these efforts," the IMF official had said.