ISLMABAD - The Executive Board of the International Monetary Fund (IMF) on Monday approved the third tranche of $555.6 million for Pakistan under the Extended Fund Facility after reviewing the country's economic performance of second quarter (Oct to Dec) of the ongoing financial year (2013-2014).
The Executive Board of the International Monetary Fund (IMF) has completed the second review of Pakistan's economic performance under a three-year programme supported by an arrangement under the Extended Fund Facility (EFF) at Washington. The completion of the review enables an immediate disbursement of an amount equivalent to SDR 360 million (about $555.6 million).
The current tranche would take the country's foreign exchange reserves to $10 billion by the end of current month (March), as country would receive this amount $555.6 million in next two to three days. Pakistan's foreign exchange reserves currently stood at $9.65 billion.
Apart from current installment, Pakistan had already received two tranches worth of around $1.1 billion under the 36-month extended arrangement under the EFF in the amount of SDR 4.393 billion (about $6.78 billion, or 425 per cent of Pakistan's quota at the IMF) was approved by the Executive Board on September 4, 2013..
In completing the second review, the Executive Board also approved the authorities' request for waivers of non-observance of the end-December 2013 performance criteria on net swap/forward position and government borrowing from the State bank of Pakistan (SBP) based on corrective actions taken by the authorities.
The government had sought waivers from the IMF for failure to meet two performance benchmarks including performance criteria on net swap/forward position and government borrowing from the State bank of Pakistan. Government borrowing from the State Bank of Pakistan (SBP) stood at Rs 2,611 billion by end-December 2013 as opposed to the agreed target of Rs 2,560 billion. Similarly, the ceiling on SBP stock of net foreign currency swap/forward position was set at Rs 2,255 billion for end-December 2013 but in fact it was Rs 2,650 billion. Therefore, the Fund has approved the government's request.
An IMF staff mission, led by Jeffrey Franks, met with the Pakistan authorities in Dubai from February 1-9, 2014 for discussions on the second review of Pakistan's IMF-supported programme under the Extended Fund Facility (EFF) approved by the Executive Board of the IMF on September 4, 2013. Therefore, the Executive Board of IMF has approved the next tranche after reviewing IMF staff mission's report.