Tuesday August 09, 2022

IMF approves $1 billion loan tranche for Pakistan

Taking to Twitter, Federal Minister for Finance and Revenue Shaukat Tarin confirms the news

By Web Desk
February 02, 2022
A picture of the IMF headquarters in Washington DC. — AFP/File
A picture of the IMF headquarters in Washington DC. — AFP/File

The  International Monetary Fund's (IMF) Executive Board on Wednesday approved Pakistan's request for an $1 billion loan tranche.

The country's finance minister, Shaukat Tarin, took to his official Twitter account and confirmed the news. 

"I am pleased to announce that IMF Board has approved 6th tranche of their programme for Pakistan," Tarin announced. 

A meeting of the  IMF’s Executive Board took place today in Washington DC to discuss and finalise  Pakistan’s request for the completion of the sixth Review and release of a $1 billion tranche under the Extended Fund Facility (EFF).

In order to meet another condition of the International Monetary Fund (IMF), the government had successfully managed to get the State Bank (Amendment) Bill, 2021, cleared from the Upper House of Parliament — which was the last stumbling block in reviving the stalled programme.

Following the clearance of the bill, all prior conditions of the Fund had been fulfilled by Pakistan, including the approval of the mini-budget and SBP bill.

The SBP bill was passed with a majority of just one vote as 43 senators voted in favour of the government’s tabled bill while 42 senators voted against it.

Keeping in view the requests from Pakistan, the IMF had postponed its Executive Board meetings thrice this month.

The IMF board meeting was postponed last time from January 28 to February 2, 2022. The loan programme has been stalled since April 2021, hence, the sixth review will be completed after nine months.

Meanwhile, the next review (seventh) under the $6 billion EFF programme will be due in April 2022. The last and final eighth review is expected to be done in September 2022.

Despite objections raised by the parliamentarians as well as independent economists, the government passed the SBP Amendment Bill 2021 with the objective of targeting inflation and ignoring growth objectives, slapping a ban on borrowing of government, abolishing the Monetary and Fiscal Coordination Board, extending the tenure of governor SBP from three to five years with the possibility of one more extension of five years.