IMF allows Pakistan to utilise $2.78b Covid support fund

Staff Reporter

The International Monetary Fund (IMF) has agreed to allow Pakistan to utilise $2.78 billion, equivalent to Rs500 billion, for meeting budgetary side requirements, which were provided by the Fund for combating the Covid-19 pandemic.

The IMF usually provides Balance of Payment (BoP) support to recipient countries but in special cases it allows countries to utilize its resources for financing budgetary requirements as well.

Upon the request made by Pakistan, the IMF has agreed in principle, and an announcement to this effect is expected along with the approval of the $1 billion tranche under the pending sixth review of Extended Fund Facility (EFF).

The commercial banks are eyeing to provide T-bills financing at higher rates, so the provision of budgetary support of Rs500 billion will spoil dreams of earning lofty profits.

“The Ministry of Finance has made a request to the IMF for allowing utilization of $2.78 billion windows provided for fighting Covid-19 pandemic for the purpose of meeting financing of budgetary requirements.” In this regard ministry had already written a letter to IMF.

Pakistan had received $2.78 billion from the IMF under the Special Drawing Rights Program as the Fund announced $650 billion programs for low-income countries severely hit by coronavirus.

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