IMF approves $1.32bn in fresh funding for Pakistan

WEB DESK: The Executive Board of the International Monetary Fund (IMF) has officially approved a fresh disbursement of $1.32b (£1.04b) for Pakistan.

This financial injection comes as part of the ongoing efforts to bolster the South Asian nation’s economic recovery, split between the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) programmes, according to Radio Pakistan.

According to a statement released by the multilateral lender, this latest approval brings the total disbursements under the two current arrangements to approximately $4.8b.

The funding is intended to provide a critical cushion for Pakistan’s foreign exchange reserves and support the government’s structural reform agenda.

Economic resilience amid regional tensions

In its assessment, the IMF praised Islamabad’s “strong implementation” of prescribed fiscal policies. Despite the heightened geopolitical volatility caused by the ongoing conflict in the Middle East, the Fund noted that Pakistan has managed to maintain a semblance of economic stability.

The Board highlighted that the country’s adherence to the programme’s conditions has led to improved financing terms and more favourable external conditions, which are vital for long-term debt sustainability.

Addressing climate and structural reform

The inclusion of the Resilience and Sustainability Facility in this package underscores a shift towards addressing Pakistan’s extreme vulnerability to climate change.

The IMF emphasised that while immediate macroeconomic stability remains the priority, the additional funds will assist in building buffers against external shocks and climate-related disasters.

Moving forward, the Fund expects continued commitment to market-determined exchange rates and stringent budgetary discipline to ensure that the current inflationary pressures remain on a downward trajectory.