IMF executive board decides over Pakistan’s EFF extension
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ISLAMABAD – The executive board of the International Monetary Fund (IMF) will meet today (Monday) to consider the loan plan for Pakistan
Pakistan also made a request to the Fund’s Board to augment the Extended Fund Facility (EFF) from $6 billion to $7 billion and jack up the timeframe from September 2022 to June 2023.
However, amid ongoing political turmoil in the country, it is expected that the two-day later focus will shift to PTI Chairperson Imran Khan’s court hearing as he battles a string of legal troubles.
It should be noted that Pakistan’s dollar bonds have been the top performers in emerging markets in August after Belarus. Meanwhile, the rupee also soared above its peers as investors cheer the prospect of IMF funds.
However, the development on the political front can put fragile financial stability at risk as supporters of Imran Khan stage protests.
Prime Minister Shehbaz Sharif-led government will get a massive boost with the resumption of the programme as it will help avert what would be the second default in Asia this year after Sri Lanka.
Islamabad needs to pay at least $3 billion to service debt in the first half of fiscal 2023, according to Bloomberg Economics. With the IMF loan paving the way for more financing, the State Bank of Pakistan expects foreign-exchange reserves to rise to about $16 billion this fiscal year from $7.8 billion.
