Pakistan is likely to receive the first tranche of the International Monetary Fund (IMF) bailout package during next week. Sources told Business Recorder Saturday that the IMF is most likely to release $1 billion to Pakistan on Monday as first tranche of $6 billion bailout package and accordingly the amount will land into the State Bank of Pakistan's account Tuesday morning.
The arrival of inflows from the IMF will help strengthen the depleting foreign exchange reserves of the country and ease pressure on external account. The IMF programme will also help Pakistan reduce economic vulnerabilities and generate sustainable and balanced economic growth. On July 3, 2019, the Executive Board of the IMF had approved a 39-month arrangement under the Extended Fund Facility (EFF) for Pakistan for an amount of SDR 4,268 million (about US$6 billion or 210 percent of quota) to support the authorities' economic reform programme.
With the approval of the EFF, the IMF board also announced an immediate disbursement of SDR716 million (or about $1 billion), likely to arrive next week. The remaining amount of the bailout package will be phased over the duration of the programme, subject to 4 quarterly reviews and 4 semi-annual reviews.
Pakistan facing a balance of payment crisis for the last one year and foreign exchange reserves are gradually depleting due to continuous and massive external debt servicing. Pakistan's total foreign exchange reserves stand at $14.4 billion, including $7.2 billion of the SBP and some $7.1 billion of banks.
The country has already obtained some $7.5 billion from friendly countries to build its foreign exchange reserves and avoid default. Saudi Arabia has placed some $3 billion and UAE $2 billion with Pakistan for one year. In addition, China has also provided a soft loan of $ 2 billion to support balance of payment. Recently, Qatar has also provided $500 million to Pakistan.
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