Pakistan and the Monetary Fund had consented to an arrangement worth $6 billion in July 2019.
Be that as it may, in January, 2020, the program stalled out and in March this year it was resuscitated for at some point. Be that as it may, in June it was wrecked once more.
The International Monetary Fund’s (IMF) Executive Board of Directors on Monday endorsed the resumption of Pakistan’s Extended Fund Facility (EFF) program. With this, the desperate nation will get US $ 1.17 billion (Rs 9,300 crore) as the seventh and eighth portions.
Finance Minister Miftah Ismail said the Monetary Fund’s board of directors has approved the resumption of the EFF program. He wrote on Twitter, “We will get USD 1.17 billion as 7th and 8th installment I want to thank PM Shahbaz Sharif for taking such tough decisions and saving Pakistan from default. I congratulate the country.”
An additional fund of one billion dollars has also been approved
Pakistan and the Monetary Fund had signed an agreement worth $6 billion in July 2019. But in January, 2020, the program got stuck and in March this year it was revived for sometime. But in June it was derailed again.
But now the IMF has also approved an additional fund of one billion dollars.
This has brought the total amount under the EFF program to US$ 7 billion and has been extended till June 2023.
The move comes after the IMF completed four billion US dollars in bilateral financing from four friendly countries, including China and Saudi Arabia, and would pave the way for immediate payments. The IMF board meeting was called after Saudi Arabia, the United Arab Emirates, Qatar and China ratified the IMF.
These four countries confirmed that they have completed the arrangement of US$ 4 billion as bilateral financing to Pakistan. This was the last hitch in the bailout package after completing all prior actions agreed under the Service Level Agreement (SLA).
The approval of the IMF board is expected to save the ever-decreasing foreign exchange reserves in Pakistan and strengthen the Pakistani rupee and meet the balance of payments. Ahead of the IMF board meeting, Prime Minister Shehbaz Sharif on Sunday accused ousted Prime Minister Imran Khan’s Pakistan Tehreek-e-Insaf party of trying to sabotage the agreement with the IMF, saying that the country would be affected by politics done for its own benefit. will be dealt with a great injustice.
Pakistani currency at all-time low
Pakistan’s currency has slipped to an all-time low of 240 in April amid uncertainty over Imran’s expulsion and IMF aid. Earlier this month, New York-based rating agency S&P Global upgraded Pakistan’s long-term rating from ‘stable’ to ‘negative’ in view of rising inflation and tighter global financial conditions.
Pakistan is in debt of Rs 43 lakh crore
Pakistan’s debt from IMF, World Bank, China and other countries has reached 70 percent of its total GDP. This information was given by Murtaza Syed himself, the acting governor of the State Bank of Pakistan (SBP) in July. At present, Pakistan has a total debt of 43 lakh crore Pakistani rupees. Out of this, a loan of Rs 18 lakh crore has been taken during the last three years. Due to the ever-decreasing foreign exchange reserves and gold reserves, repaying the installments of this loan is also proving to be a big challenge for Pakistan.
Inflation tops in Pakistan
Fuel imports in Pakistan have been affected amid the economic crisis. Its direct effect is also being seen on the inflation in the market. Inflation has also increased suddenly due to floods. In Pakistan’s richest province of Punjab, the price of tomato has reached Rs 500 per kg, while the price of onion has reached Rs 400 per kg on Sunday.