ISLAMABAD               -         The International Monetary Fund (IMF) would approve second tranche worth of $450 million on December 19 for Pakistan under the $6 billion Extended Fund Facility.

The IMF’s Executive Board meeting is scheduled for December 19 to consider the staff level report and approval of second tranche of about $450 million under the $6 billion Extended Fund Facility (EFF). Pakistan would receive the second tranche within this month after the approval from the IMF.

This would be another major inflow in the country during current month, as Asian Development Bank (ADB) had already given $1.3 billion to Pakistan. The ADB has approved $1 billion in immediate budget support to Pakistan to shore up the country’s public finances and help strengthen a slowing economy.

Meanwhile, the ADB has also approved a $300 million policy-based loan that will help the Government of Pakistan to address financial sustainability, governance, and energy infrastructure policy constraints in Pakistan’s energy sector.

Later, the World Bank had also signed $406.6 million with Pakistan for Khyber Pass Economic Corridor (KPEC) Project.

The IMF mission led by Ernesto Ramirez Rigo visited Islamabad from October 28 to November 8, 2019 to conduct discussions on the first review under the EEF.

The IMF in July this year had approved a three-year, $6 billion loan to support Pakistan’s economic plan. Pakistan had already received an upfront disbursement of $991 million on completion of all prior actions committed by Pakistan before signing the fund programme. The IMF had linked the remaining tranches with the economic performance of the country.

At the end of the visit, Ramirez Rigo said “The Pakistani authorities and IMF staff have reached a staff-level agreement on policies and reforms needed to complete the first review under the EFF.

The agreement is subject to approval by IMF management and the Executive Board of Directors. Completion of the review will enable disbursement of SDR 328 million (or around US$ 450 million) and will help unlock significant funding from bilateral and multilateral partners.”

He further said that despite a difficult environment, programme implementation has been good, and all performance criteria for end-September were met with comfortable margins. Work continues towards completing the remaining structural benchmarks for end-September.

Significant progress has been made in improving the AML/CFT framework, although additional work is needed before March 2020. International partners remain committed to supporting the authorities’ reform efforts, providing the necessary financing assurances.