IMF revives Pakistan's EFF programme, approves USD 1.17 billion bailout fund

ISLAMABAD: Pakistan took a sigh of relief as the IMF on Monday approved the revival of its Extended Fund Facility (EFF) programme after which the cash-strapped country will receive the 7th and 8th tranche of USD 1.17 billion.

The decision was taken at the IMF's executive board meeting in Washington, which would immediately provide USD 1.17 billion to foreign exchange starving Pakistan.

Finance Minister Miftah Ismail said that the International Monetary Fund's Board has approved the revival of Pakistan's EFF program.

"We should now be getting the 7th & 8th tranche of USD 1.17 billion. I want to thank Prime Minister @CMShehbaz for taking so many tough decisions and saving Pakistan from default. I congratulate the nation," tweeted Ismail, who had left no stone unturned to fulfill the hefty demands of the donor.

Pakistan and the IMF had signed the USD 6 billion deal in July 2019 but the programme was derailed in January 2020 and restored briefly in March last year before again going off the track in June.

The present government which got power in April this year after toppling Khan's government began an effort to revive the program.

The global lender also approved to increase the loan size to around USD 7 billion and extended it till June 2023.

The development follows the completion of the USD 4 billion in bilateral financing from four friendly nations, including China and Saudi Arabia, and would pave the way for immediate disbursement.

The board meeting was convened after Saudi Arabia, the United Arab Emirates, Qatar and China confirmed to the IMF that they had completed arrangements for USD 4 billion in bilateral financing to Pakistan, which was the last hitch to the bailout package after completion of all the prior actions agreed under the SLA.

The IMF board's clearance is expected to reverse continuously depleting foreign exchange reserves, strengthen the Pakistani rupee and support the balance of payments.

Ahead of the IMF board meeting, Prime Minister Shehbaz Sharif on Sunday accused ousted premier Imran Khan's Pakistan Tehreek-e-Insaf party of trying to sabotage the deal with the IMF, asserting that "self-centred politics" will cause huge injustice to the country.

Since Khan's ouster in April, Pakistan's currency has plummeted to an all-time low of 240, amid uncertainty about IMF assistance.

Earlier this month, New York-based rating agency S&P Global revised Pakistan's long-term ratings from 'stable' to 'negative' given the spiralling inflation and tighter global financial conditions.