The final approval of this agreement will be given by the IMF’s executive board, which is expected to take place in mid-July.
“Stand-By Arrangement” between IMF with Pakistan has been reached successfully.
The staff-level agreement with Pakistan has been made under a Stand-By Arrangement for 9 months.
Ishaq Dar, SBP governor sign LOI for $3 b agreement with IMF
PM hopes IMF’s SBA to help Pakistan achieve economic stability; reiterates nations are’t built thru loans
ISLAMABAD ( Web News )
International Monetary Fund (IMF) on Friday, announced that a “Stand-By Arrangement” between the global money lender with Pakistan has been reached successfully.
According to the details, a staff-level agreement has been concluded between Pakistan and the IMF, valuing $3 billion for 9 months.
IMF Mission Chief Nathan Porter along with his team maintained continuous communication with Pakistani authorities and completed the agreement through virtual negotiation.
The final approval of this agreement will be given by the IMF’s executive board, which is expected to take place in mid-July. After this approval, Pakistan can receive a loan of $3 billion.
Nathan Porter further stated that Pakistan’s parliament played an important role in achieving economic goals and took significant steps to increase tax revenues. The parliament has increased funds for Benazir Income Support Program and limited exemptions in taxes.
IMF Mission Chief stated that the increase in tax revenues can result in a primary surplus of 0.4 per cent for Pakistan’s economy and the additional funds generated through increased tax revenues can be allocated to social sectors.
The agreement is under a Stand-By Arrangement (SBA), as the existing Extended Financing Facility (EFF) programme signed in 2019 expires later on Friday.
PM hopes IMF’s SBA to help Pakistan achieve economic stability; reiterates nations are’t built thru loans
Prime Minister Muhammad Shehbaz Sharif on Friday reiterated that while the International Monetary Fund Stand-by Agreement (SBA) was a much-needed breather, which would help the country achieve economic stability, but the nations were not built through loans.
In a lengthy tweet, the prime minister referred to his core argument in today’s presser held in Lahore on the occasion of signing of the SBA.
The prime minister also prayed for this new programme to be the last one for Pakistan.
He further said that under a whole-of-the-government approach, they had worked out an Economic Revival Plan, which would focus on unlocking their strategic potential in agriculture, mine and minerals, defence production and information technology.
The plan would bring up investments of billions of dollars and create job opportunities for four million people, he added.
The prime minister observed that it might be a tough journey and quoted “When the going gets tough, the tough gets going.”
He also expressed his special thanks to friends and partners such as China, Saudi Arabia, United Arab Emirates and Islamic Development Fund for standing by Pakistan at the time of massive economic challenges.
Ishaq Dar, SBP governor sign LOI for $3 b agreement with IMF
Federal Finance Minister Ishaq Dar and Governor State Bank of Pakistan (SBP) Jameel Ahmad signed a Letter of Intent (LOI) for a nine-month US$ 3 billion Stand By Agreement with the International Monetary Fund (IMF) here on Friday at the Governor’s House.
Prime Minister Shehbaz Sharif witnessed the signing ceremony whereas Minister for Information and Broadcasting Marriyum Aurangzeb and Punjab Governor Muhammad Baligh-ur-Rehman were also present on the occasion.
The IMF had issued the LOI after reaching a staff level agreement for loan programme with Pakistan under the memorandum of economic and fiscal policies.
Here are some facts about the lead-up to the last-gasp agreement:
May 2019: IMF approves a $6 billion, 39-month bailout package for Pakistan under the EFF struck with the government of then Prime Minister Imran Khan.
April 2022: Khan’s government is removed in a parliamentary vote of no confidence. Shehbaz Sharif takes over as Prime Minister as the country reels from economic and political turmoil.
July 2022: IMF and Pakistan reach staff-level agreement for the release of about $1.2 billion in the last successful EFF review until the SBA.
Aug 2022: The IMF board approves the seventh and eighth reviews of the bailout programme, allowing for a release of over $1.1 billion and an extension by a year.
Sept 2022: Miftah Ismail resigns as finance minister, the fifth such minister to be replaced in less than four years.
Ishaq Dar takes over as finance minister for his fourth stint in the job, with Pakistan’s next staff review, the ninth under the EFF, and funds tranche due in November.
Nov 2023: Pakistan, IMF begin virtual engagement for the ninth review of the loan programme. A staff delegation visit does not materialise due to differences on programme targets, and Dar hits out at the IMF for the delay.
Jan 2023: Pakistan reiterates commitment to completing the IMF programme in a meeting on the sidelines of a climate conference in Geneva.
An IMF staff delegation visits Pakistan after weeks of delays, but the 10-day visit concludes without an agreement to send the matter to the board, increasing economic uncertainty.
Feb 2023: Pakistan, IMF decide to resume talks virtually on steps needed to secure an agreement for the ninth review.
May 2023: IMF mission chief says continuing to work with Pakistani authorities to bring the ninth review to conclusion once necessary financing is in place.
June 22, 2023: Sharif meets IMF Managing Director Kristalina Georgieva in Paris, looking to secure a last minute release of the stalled funds before the programme expires on June 30.
June 24, 2023: Pakistan changes its budget for the financial year starting on July 1, including the latest fiscal tightening measures dictated by the IMF.
June 26, 2023: Pakistan’s central bank raises its benchmark interest rate by 100 basis points to 22% at an emergency meeting days before IMF programme expires.
June 30, 2023: IMF reaches staff-level agreement with Pakistan on $3 billion funding, which is spread over nine months and is higher than expected. The country was awaiting the release of the remaining $2.5 billion from the $6.5 billion bailout package agreed in 2019, which was expiring on Friday.