ISLAMABAD – In a significant development, the International Monetary Fund (IMF) has delivered the first installment of $1.2 billion to Pakistan’s central bank as part of a recently signed bailout agreement. The financial injection aims to assist the impoverished Islamic nation in averting a debt default and stabilizing its economy.
Pakistan’s Finance Minister, Ishaq Dar, confirmed the arrival of the funds during a televised address on Thursday. He further stated that the remaining $1.8 billion would be disbursed by the IMF over the next nine months. This influx of funds is expected to strengthen the country’s foreign exchange reserves, which had dwindled to less than $4 billion in recent months, leading to concerns about potential default.
According to Dar, Pakistan’s foreign exchange reserves are projected to increase to $14 billion by the end of this week, a notable improvement resulting from the IMF’s assistance.
This positive development follows the approval of a $3 billion loan by the IMF’s executive board, as announced on Wednesday. The loan is intended to support Pakistan’s economic stabilization program. The agreement was reached less than two weeks after extensive discussions between Prime Minister Shehbaz Sharif, Finance Minister Dar, and other officials.
In a statement, IMF Chief Kristalina Georgieva acknowledged that Pakistan’s economy had endured significant shocks in the past year, including the severe impact of floods, volatile commodity prices, and tightening external and domestic financing conditions. Georgieva emphasized that the successful implementation of the $3 billion bailout package, coupled with consistent policy execution, would provide Pakistan with an opportunity to regain macroeconomic stability and address existing imbalances.
The road to securing the IMF bailout had been arduous, with delays since December due to Pakistan’s failure to comply with a 2019 agreement signed with the IMF under former Prime Minister Imran Khan. However, a breakthrough occurred last month when Prime Minister Shehbaz Sharif met with Kristalina Georgieva during the Summit for a New Global Financing Pact in Paris.