The State Bank of Pakistan (SBP) has confirmed the receipt of the final installment of Special Drawing Rights (SDR) 528 million, approximately equivalent to $1.1 billion, from the International Monetary Fund (IMF). This injection of funds will bolster Pakistan’s foreign exchange reserves, with the impact expected to reflect in the reserves for the week ending on May 3, 2024.
With this latest disbursement, Pakistan’s total foreign exchange reserves are set to rise, providing a much-needed cushion against external economic pressures. Currently standing at around $8 billion, these reserves play a crucial role in maintaining stability in the country’s economy.
The IMF’s support comes within the framework of Pakistan’s 9-month Stand-By Arrangement (SBA), approved by the Executive Board on July 12, 2023. According to a statement issued by the Fund, this program has served as a policy anchor, addressing both domestic and external imbalances while providing a vital framework for financial support from various multilateral and bilateral partners.
Key areas of focus under the program included fiscal adjustment, debt sustainability, protection of social spending, and mitigation of external shocks. Additionally, efforts were made to address foreign exchange shortages, advance disinflation, and implement structural reforms, particularly in sectors such as energy, state-owned enterprise governance, and climate resilience.
Looking ahead, Pakistan is actively seeking a new, long-term IMF loan to bridge its external financing gaps. Finance Minister Muhammad Aurangzeb emphasized Pakistan’s commitment to entering into an extended program with the IMF during his remarks at the JP Morgan seminar on economic growth and development.
