Pakistan receives second tranche from IMF: SBP confirms

KARACHI: Pakistan has received the second tranche of the IMF loan under its $7 billion Pakistan’s Extended Fund Facility (EFF) programme, the State Bank of Pakistan (SBP) announced on Wednesday.

The second tranche of the loan program, of more than $1billion has been transferred to the central bank. The amount will be reflected in the SBP’s reserves on May 16, the announcement added.

The executive board of the IMF had approved the first review of the programme on Friday (May 9). The IMF board discussed the review and a new sustainability loan as well, of $1.3 billion for a period of over two years. This additional loan is designed to support long-term climate adaptation and resilience, and Pakistan aims to utilise these funds over the next 28 months. Further information about the new loan is not as yet available.

IMF’s approval came during the active conflict of India and Pakistan, and despite India asking the IMF to review the loans to Pakistan. During the conflict, and prior to the IMF’s review, India had also terminated Dr Krishnamurthy Subramanian as a board member and Executive Director (India) at the IMF. This was also touted as a desperate attempt to interfere with the scheduled IMF meeting on May 9.

However, all such tactics failed because Pakistan is already part of the programme and has also fulfilled all prerequisites Pakistan also secured the staff-level approval without any additional conditions.

The staff-level agreement on both programmes was reached before the current hostilities rose. Pakistan and India accused each other on Friday of launching drone and artillery attacks overnight as tourists and villagers fled.

Talks between the IMF and Pakistan, led by IMF mission chief Nathan Porter, took place from February 24 to March 14 in Karachi and Islamabad, followed by virtual consultations. The review approval brings disbursements to $2 billion within the $7 billion programme.

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