The International Monetary Fund (IMF) Executive Board on Wednesday approved a staff-level agreement reached with Pakistan on a short-term stand-by deal.

“Today, the Executive Board of the International Monetary Fund (IMF) approved a 9-month Stand-By Arrangement (SBA) for Pakistan for an amount of SDR2,250 million (about $3 billion, or 111 percent of quota) to support the authorities’ economic stabilization program,” the global lender said in a statement.

The development comes hours after Finance Minister Ishaq Dar said that Pakistan received $1 billion from the United Arab Emirates (UAE) as part of its financial commitment to help Pakistan secure the International Monetary Fund (IMF) bailout package.

“We have received $1 billion from the UAE. The UAE has deposited the amount into the State Bank account,” the financial czar announced in a televised media address on Wednesday.

A day earlier, the finance minister said Saudi Arabia deposited $2 billion in the SBP account to help the boost the country foreign reserves and fulfill the global lender’s condition to bridge external financing gap.

Islamabad signed a short-term IMF deal on June 30 under which the country will receive $3 billion over nine months, subject to approval by the IMF’s board.

The Executive Board’s approval allows for an immediate disbursement of SDR894 million (or about US$1.2 billion), the IMF said in the statement today.

The remaining amount will be phased over the programme’s duration, subject to two quarterly reviews, it added.

The IMF said the SBA was signed at a “challenging economic juncture for Pakistan”.

“A difficult external environment, devastating floods, and policy missteps have led to large fiscal and external deficits, rising inflation, and eroded reserve buffers in FY23,” it added.

Pakistan’s new SBA-supported programme, the IMF said will provide a policy anchor for addressing domestic and external imbalances and a framework for financial support from multilateral and bilateral partners. 

More to follow..