Pakistan Gets Initial IMF Approval for $1.2 Billion of Loans
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Article content(Bloomberg) — Pakistan reached an initial agreement with the International Monetary Fund to unlock about $1.2 billion from a $7 billion bailout program, as geopolitical risks from the conflict in the Middle East threaten to upend its economic recovery.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe South Asian country is set to have access to about $1 billion under the global lender’s so-called Extended Fund Facility, and about $210 million under the climate-focused Resilience and Sustainability Facility, the IMF said in a statement late Friday. The loan disbursement is subject to approval by the IMF Executive Board.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentThe latest tranche would bring total disbursements under the two arrangements to about $4.5 billion, it said.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentPakistan’s “inflation and the current account balance remained contained, and external buffers continued to strengthen,” the Washington-based lender said. “The authorities remain committed to pursuing sound and prudent macroeconomic policies to preserve the recent gains in macro-financial stabilization.”Article contentStill, it cautioned that the war in the Middle East “casts a cloud over the outlook as volatile energy prices and tighter global financial conditions risk putting upward pressure on inflation and weigh on growth and the current account.”Article contentPakistan needs funds to support its cash-starved economy that’s heavily dependent on imported fuel.
Prime Minister Shehbaz Sharif announced a series of austerity measures earlier this month to curb government spending and save fuel as the war in Iran disrupts energy supplies.Article contentThe central bank “remains committed to keeping inflation within its target range and stands ready to raise interest rates should price pressures intensify or inflation expectations rise, including from passthrough of recent volatility in global food and fuel prices,” the IMF said. “Exchange rate flexibility should continue to serve as the primary shock absorber, including against spillovers from the conflict in the Middle East.”Article contentPakistan has carried out sweeping reforms in recent years under the IMF program to rebuild its foreign-exchange reserves and meet debt obligations, raising gas and electricity prices and imposing new taxes. But those steps have fueled public protests.Article content—With assistance from Tooba Khan.Article contentTrending Quebec demands Air Canada’s CEO resignation in 92 to 0 vote Airlines This TSX stock was a top gainer on the week with a 40% upside possible based on its growing market share, analyst says Investor Markets could be making the wrong call on interest rates Investor Why waiting to lock in your variable rate often backfires Mortgages Canadian quantum stock Xanadu jumps in first day of trading on Nasdaq Innovation Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Quebec demands Air Canada’s CEO resignation in 92 to 0 vote Airlines This TSX stock was a top gainer on the week with a 40% upside possible based on its growing market share, analyst says Investor Markets could be making the wrong call on interest rates Investor Why waiting to lock in your variable rate often backfires Mortgages Canadian quantum stock Xanadu jumps in first day of trading on Nasdaq Innovation