Pakistani Finance Minister Miftah Ismail announced via Twitter that the International Monetary Fund (IMF)’s Board of Directors approved the seventh and eighth reviews of the extended fund facility for Pakistan, releasing 1.17 billion dollars to the cash-strapped country.
The IMF agreed to extend the program for another year and increase total funding by approximately $894 million of special drawing rights (or about $1.1 billion at the current exchange rate).
According to Pakistan’s Minister of Planning, the money will provide a lifeline to the South Asian country, which is suffering from devastating floods that have caused losses of at least $10 billion.
In a statement, IMF Deputy Executive Director Antoinette Sayeh said that adhering to planned increases in fuel taxes and energy surcharges is “essential” as Pakistan’s economy faces adverse external factors such as the fallout from the Ukraine war, as well as domestic challenges such as accommodative policies that have resulted in “uneven growth and unbalanced growth”.
Pakistan’s foreign exchange reserves have dwindled to the equivalent of only seven months’ worth of imports, and the country’s economy is grappling with large current account deficits and high inflation.
The IMF announced the approval and amount of money to be disbursed hours after Pakistani Finance Minister Miftah Ismail announced the news on Twitter.
The Fund’s extended facility program, which was initially approved for 36 months and was worth $6 billion at the time of approval in 2019, has been stalled since earlier this year as Islamabad has struggled to meet IMF targets.
Recently, King Salman bin Abdulaziz Al Saud directed a one-billion-dollar investment in Pakistan, emphasizing Saudi’s support for the economy and people of Pakistan.