EEF: SBP confirms receiving of $1.16 billion proceeds from IMF

Islamabad: Pakistan has received the fresh installment of $1.16 billion under the bailout package from the International Monetary Fund (IMF).

The State Bank of Pakistan (SBP) confirmed the receiving of proceeds in a twitter announcement.

In a statement issued by the State Bank, it is said that an installment of $1.16 billion has been received from the IMF, the IMF Board has released the installment after the completion of the seventh and eighth reviews.

"SBP has received proceeds of USD 1.16 billion (equivalent of SDR 894 million) after the IMF Executive Board completed the combined seventh and Eight review under the Extended Fund Facility (EFF) for Pakistan," the bank's tweet said.

1/2 Today, #SBP has received proceeds of USD 1.16 billion (equivalent of SDR 894 million) after the IMF Executive Board completed the combined seventh and Eight review under the Extended Fund Facility (EFF) for Pakistan.

— SBP (@StateBank_Pak) August 31, 2022

The State Bank says that the money received from the IMF will help improve foreign exchange reserves.

On Tuesday, the IMF had announced to approve the extension of Pakistan's loan program until June 2023. The loan program for Pakistan has been increased from $6 billion to $6.5 billion.

The EFF was approved by the Executive Board on July 3, 2019 for SDR 4,268 million (about $6 billion at the time of approval, or 210 percent of quota).

In order to support programme implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the IMF Board approved an extension of the EFF until end-June 2023, rephasing and augmentation of access by SDR 720 million that would bring the total access under the EFF to about $6.5 billion.

The programme seeks to address domestic and external imbalances, and ensure fiscal discipline and debt sustainability while protecting social spending, safeguarding monetary and financial stability, and maintaining a market-determined exchange rate and rebuilding external buffers.

The IMF said Pakistan's economy faces challenges, Pakistan must reduce energy losses and increase tax revenue, Pakistan must ensure a market-based exchange rate, improve the business environment.

Sustainable growth can be ensured and raising interest rates is the best measure to control inflation.