The International Monetary Fund's executive board is set to convene on January 11 to finalize approval for the disbursement of the next $700 million installment from Pakistan's existing $3 billion loan program.
Last month, the IMF confirmed a staff-level agreement with Pakistan, marking the first review of the $3 billion bailout. This agreement is pivotal, unlocking $700 million in funds, which constitutes the program's second tranche.
Pakistan has grappled with a severe balance of payments crisis, seeing a depletion in foreign exchange reserves and record-high inflation.
On November 16, Pakistan and the IMF reached a staff-level consensus on the initial review within Pakistan’s Stand-By Arrangement (SBA). This pact reinforces the government’s commitment to progressing fiscal consolidation, expediting cost-reducing measures in the energy sector, finalizing the transition to a market-driven exchange rate, and pursuing reforms in state-owned enterprises and governance to stimulate investment and job growth, all while enhancing social assistance programs.
It's worth noting that Pakistan is currently under a caretaker government following an IMF loan program approved in July, which helped prevent a sovereign debt default.
Through the $3 billion standby arrangement (SBA), Pakistan received an initial $1.2 billion from the IMF in July.
