Finance1 min read

Pakistan-IMF staff deal to unlock $1.2 billion

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In short

Pakistan is poised to receive $1.2 billion in financing from the International Monetary Fund (IMF), potentially easing its financial strain and bolstering its foreign exchange reserves. This deal, if approved, could unlock $1 billion under the Extended Fund Facility and $210 million under the Resilience and Sustainability Facility, bringing total disbursements under both programs to around $5.7 billion. However, risks remain high due to geopolitical tensions, volatile energy prices, tighter global financial condit…

Key points

  • The deal could unlock $1 billion under the Extended Fund Facility and $210 million under…: The deal could unlock $1 billion under the Extended Fund Facility and $210 million under the Resilience and Sustainability Facility.
  • Total disbursements under both programs would reach around $5.7 billion.: Total disbursements under both programs would reach around $5.7 billion.
  • Risks remain high due to geopolitical tensions, volatile energy prices, tighter global fi…: Risks remain high due to geopolitical tensions, volatile energy prices, tighter global financial conditions, and trade disruptions.

* If the board approves the deal, Pakistan could access about $1 billion under the Extended Fund Facility and $210 million under the climate-focused Resilience and Sustainability Facility, bringing total disbursements under the two programs to around $5.7 billion.

* Pakistan remains reliant on external financing to bolster foreign exchange reserves and meet debt repayments.

* "Supported by the EFF, the authorities have successfully navigated the impact of the Middle East conflict, and strong policies have helped preserve macroeconomic stability," the fund said.

* Risks remain elevated, however, due to geopolitical tensions, volatile energy prices, tighter global financial conditions and trade disruptions, the IMF said.

* Pakistan is the most vulnerable major Asia-Pacific economy to a prolonged Middle East conflict, given its dependence on Gulf energy imports, remittances and financing support from the region, Ahmad Mobeen, principal economist at S&P Global Market Intelligence, said earlier this year.

Original source: economictimes.indiatimes.com

Finance