It is indeed heartening to note that the Executive Board of International Monetary Fund (IMF) has accorded its approval to US$3 billion 9-month Stand-By Arrangement (SBA) that Pakistan and the Fund reached a few days ago. The acceptance of or approval to SBA by Fund’s board was expected, it is highly significant nevertheless.
Hours before the Fund’s board reached this decision, the United Arab Emirates (UAE) had deposited $1 billion with State Bank of Pakistan to support country’s foreign exchange reserves. Saudi Arabia had already deposited $3 billion to shore up our beleaguered foreign exchange reserves. Speaking at an event yesterday, the prime minister had expressed his optimism about IMF board’s decision with regard to the bailout.
The IMF board’s decision says that prime minister’s optimism was not misplaced at all. The incumbent government deserves praise for meeting all the conditionalities that the Fund had set up for the country.
The arrival of highly valuable deposits from Saudi Arabia and the United Arab Emirates had placed Pakistan in a position to successfully persuade the IMF board to take decision in favour of this South Asian country. It is quite true that the IMF SBA has begun to yield dividends so soon.
The rating upgrade by global rating agency Fitch is a strong case in point. The IMF board’s decision with regard to SBA will certainly add to investor or business confidence in Pakistan. Prime minister Shehbaz Sharif and finance minister Ishaq Dar in particular deserve commendation for successfully breaking IMF’s procrastination for the greater good of the country.
Husna Mehdi (Islamabad)
Copyright Business Recorder, 2023
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