The International Monetary Fund (IMF) on Thursday added consideration of Pakistan’s 37-month $7 billion Extended Fund Facility (EFF) to the agenda of its Executive Board meeting for Sept. 25, as Prime Minister Shehbaz Sharif thanked “friendly” nations for helping Islamabad secure the bailout.
Islamabad and the global lender inked a staff-level agreement on the bailout in July, but the matter has been pending over the country’s delay in securing “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.” Reportedly, Pakistan needed to secure $2 billion in external financing from bilateral and commercial lenders as a prerequisite for the Executive Board’s approval.
“We are very happy to share that the board meeting is scheduled to take place on Sept. 25” for consideration of Pakistan’s EFF, IMF spokesperson Julie Kozack told a press briefing. “This is following Pakistan obtaining the necessary financing assurances from its development partners. The new EFF arrangement follows the successful implementation of the 2023 nine-month standby arrangement,” she added.
According to the spokesperson, Pakistani authorities had acknowledged that the permanent implementation of the new EFF was essential to achieve sustainable development. She maintained that consistent policymaking has supported economic stability in Pakistan, most notably a resumption of growth, a decline in inflation, and a significant increase in the country’s foreign exchange reserves.
Welcoming the development, Finance Minister Muhammad Aurangzeb said with the resolution of all pending matters with the IMF, the deal should be finalized within this month. He also thanked Prime Minister Shehbaz Sharif, the IMF negotiators, and relevant institutions for their support.
Aurangzeb also hailed the State Bank of Pakistan’s decision to reduce the policy rate, saying it would boost investment and business activities that would in turn increase employment opportunities. “The common man has started getting relief from the trend of continuous reduction in the rate of inflation,” he added.
Earlier, the prime minister had thanked “friendly” countries for their support in securing the bailout for Pakistan. “Pakistan must stand on its own feet,” he told a meeting of the federal cabinet, reiterating that he hoped the current program would prove the country’s last.