Pakistan receives $700m tranche from IMF as UAE rolls over $2b loan
Pakistan on Thursday received $700 million from the International Monetary Fund (IMF) as part of its bailout programme, the State Bank of Pakistan (SBP) confirmed in a statement.
According to SBP, it received Special Drawing Rights (SDR) 528 million —equivalent to $705.6 million in value —from the IMF following the successful completion of the first review by the global lender’s executive board under the Stand-By Arrangement (SBA).
The loan was approved after the IMF Executive Board completed its first review last week, bringing the total disbursements under the $3 billion Standby Arrangement (SBA) to about $1.9 billion, State Bank of Pakistan (SBP) Governor Jameel Ahmed confirmed Wednesday.
After the board’s approval last week, Antoinette Sayeh, Deputy Managing Director and Chair, said there were now tentative signs of activity picking-up and external pressures easing.
In effort to secure the bailout, Pakistan had implemented tough IMF-requested measures: a revamped budget, a record interest rate hike, and painful increases in electricity and gas prices.
The IMF also got Pakistan to raise $1.34 billion in new taxation to meet fiscal adjustments and the measures fuelled all-time high inflation of 38 per cent year-on-year in May, which is still hovering above 30 per cent.
United Arab Emirates Wednesday agreed to roll over the debt of 2 billion dollars to Pakistan.
State Bank of Pakistan confirmed the development in a tweet.
“UAE has confirmed rollover of its two deposits of US$1.0 billion each placed with State Bank of Pakistan for another one year which were maturing in January 2024,” SBP posted on X platform.
Earlier, it was reported that According to the Finance Ministry sources, Caretaker Prime Minister Anwaar-ul Haq Kakar has written a letter to the President of the UAE.
According to the sources, Pakistan was paying interest on these loans at two different rates: three per cent on a $1 billion loan and 6.5% on a $1 billion loan separately.