The IMF released $1.17bn in funds to Pakistan under its one-year extended bailout program for the country. The board also approved Pakistan’s request for waivers related to the nation’s failure to meet some of the program’s criteria. The IMF agreed to increase the total funding by 720mn special drawing rights (SDRs), (equivalent to $940mn). These funds will be a relief lifeline to Pakistan which is already grappling with political and financial distress, with recent devastating floods also causing damage of ~$10bn in August as per their planning minister. IMF Deputy Managing Director Antoinette Sayeh in a statement said, “Adhering to scheduled increases in fuel levies and energy tariffs is essential as Pakistan’s economy has been buffeted by adverse external conditions. These include spillovers from the war in Ukraine, and domestic challenges, including from accommodative policies that resulted in uneven and unbalanced growth,” Pakistan’s forex reserves are at $13.5bn which can cover only one month of exports. Besides, it is suffering from high inflation and a large current account deficit. Post the IMF fund release, other multilateral and bilateral avenues will be open for funding.
Pakistan’s 7.95% 2029s was down 1.88 points to 78.03, yielding 13.12%.
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