$1.4b Rapid Financing Instrument

ISLAMABAD: The IMF’s Managing Director Kristalina Georgieva said that she had good conversation with Pakistan’s Prime Minister Imran Khan on measures to mitigate the impact of COVID-19.

In a tweet on Saturday, the IMF’s MD stated that the IMF provides financial support during this difficult time and remains closely engaged on the design of policies.

Earlier, Pakistan had requested the IMF to provide $1.4 billion through Rapid Financing Instrument (RFI) and within a few days the IMF’s MD replied that the Fund team was working expeditiously to respond to this request so that a proposal can be considered by the IMF’s Executive Board as soon as possible.

Now it is expected that the IMF’s Board will take up Pakistan’s request and will grant approval for $1.4 billion request by end of next week.

There is also possibility that the completion of second review and release of third tranche worth $450 million might be delayed because new realities emerged in the aftermath of outbreak of COVID-19 virus but it is not yet clear for how much long it will be delayed. There is also possibility that second and third reviews might be clubbed together but so far noting finalised on this front. However, renowned economist Dr Ashfaque Hassan Khan has criticised the IMF for prompt response on the request of fresh loan and stated that the multilateral creditors must come up with debt relief if they really want to help the poor countries. The burdening through loans, he said, will not help the countries to find out space for diverting towards social sector.