ISLAMABAD – The International Monetary Fund (IMF) is working expeditiously to respond to Pakistan’s request for additional financing of $1.4 billion to increase foreign exchange reserves and budgetary support for fighting adverse impacts of the coronavirus pandemic.
Adviser to the Prime Minister on Finance and Revenue Abdul Hafeez Shaikh had recently said that discussions with the International Monetary Fund (IMF) were in progress for $1.4 billion additional funds for fast track disbursements on same terms as the ongoing fund programme.
He said that Pakistan was not getting additional funding of $50 billion announced by the IMF but they were discussing to get additional funding under the existing Extended Fund Facility (EFF).
The IMF also appreciated the measures taken by the government for providing relief to the masses and businessmen after prevailing wave of coronavirus pandemic.
“The authorities have continued their reform efforts to address Pakistan’s economic challenges, but progress is being threatened by the devastating effects of the COVID-19 outbreak and the deterioration in global economic and financial conditions. Prime Minister Khan and his government have swiftly approved an economic stimulus package aimed at containing the spread of the virus and providing support to affected families and businesses. Similarly, the State Bank of Pakistan has adopted a timely set of measures, including a lowering of the policy rate, new refinancing facilities to support the flow of credit, and temporary regulatory relief measures,” Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) said in a statement.
To support these efforts and ensure prompt and adequate relief to the people and the economy, the Government of Pakistan requested financial assistance under the Fund’s Rapid Financing Instrument (RFI). This emergency financing will allow the government to address additional and urgent balance of payments needs and support policies that would make it possible to direct funds swiftly to Pakistan’s most affected sectors, including social protection, daily wage earners, and the healthcare system. Our team is working expeditiously to respond to this request so that a proposal can be considered by the IMF’s Executive Board as soon as possible.
In parallel, the authorities have reaffirmed their commitment to the reform policies included in the current arrangement under the Extended Fund Facility (EFF). These reforms are crucial to boost Pakistan’s growth potential to deliver broad based benefits to all Pakistanis, especially the most vulnerable segments of the population.
“The Fund stands ready to continue to support the authorities’ efforts to implement much-needed economic and structural reforms aimed at fostering strong and sustainable growth”, she added.
The IMF had already given significant relaxation to Pakistan by excluding the government expenses pledged to counter the corona virus from the budget deficit. The government on Tuesday had announced emergency response and fiscal stimulus package announced worth of Rs1.24 trillion. The government had divided the Rs1.24tr package into three broad categories, including Rs190 billion emergency response, Rs570 billion relief for people and Rs480 billion support to business and economy.