Pakistan receives third tranche of IMF loan

The State Bank of Pakistan (SBP) on Tuesday announced that it had received the third tranche of International Monetary Fund’s (IMF) $6 billion dollar loan.

In a tweet, the central bank said, “#SBP has received IMF tranche of US$ 498.7 million (equivalent to SDR 350 million) under the Extended Fund Facility.”

Following stringent measures on Pakistan’s end, the International Monetary Fund (IMF) on March 25 agreed to release the third loan tranche of around $500 million for Pakistan while approving four pending reviews of the country’s economy.

Reportedly, the decision to revive the $6 billion programme came following government’s decisions to jack up electricity prices, impose additional taxes and to grant significant autonomy to the central bank.

According to a report, last month’s staff level agreement was endorsed by the international creditor’s Executive Board, which paved the way for the release of the next loan tranche.

It is worth mentioning here that IMF has already given $1.45 billion in the previous two tranches out of the $6 billion agreed between the international creditor and Pakistan.

Citing sources, a report stated that Pakistan would be in difficult position this year as it would impose taxes amounting to Rs700 billion and reduce expenditures in the budget for the next fiscal year.

Last month, as both sides reached the staff level agreement, a joint statement was issued to mark the occasion, wherein the Fund said that “the package strikes an appropriate balance between supporting the economy, ensuring debt sustainability and advancing structural reform”.

“Pending approval of the Executive Board, the reviews’ completion would release around $500 million,” it added.

According to financial analysts, the hold-up was due to questions around fiscal and revenue reforms.