Pakistan to receive US$2.8 billion loan from IMF
Pakistan is expected to get US$2.8 billion loan by the end of August this year, after the International Monetary Fund (IMF) Governors approved a US$650 billion SDR allocation.
The International Monetary Fund (IMF) Board of Governors has approved a general allocation of Special Drawing Rights (SDRs) worth US$650 billion (about SDR 456 billion) on August 2, 2021, to increase global liquidity.
On August 23, 2021, the general allocation of SDRs will go into effect. IMF will credit the new SDRs to IMF member countries in accordance with their existing Fund quotas.
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In its analyst call on July 27, 2021, the State Bank of Pakistan (SBP) stated that it expected to receive US$2.8 billion from the IMF in August-2021 as a result of the IMF’s proposed new global SDR allocation, subject to approval by the Fund’s governors and regardless of the Fund’s programme status.
Three previous general allocations have occurred. The most recent came in 2009, during the Global Financial Crisis when the IMF distributed US$250 billion in new SDRs to its members.
The SBP’s foreign exchange reserves are currently at US$17.8 billion, and the aforementioned influx has the potential to push SBP reserves over US$20.0 billion — the biggest in Pakistan’s history (current high: US$19.46 billion in October 2016).
PML-N and PPP have also taken advantage of the IMF scheme to obtain a loan to supplement their diminishing foreign exchange reserves.
When the PTI government first took office, it faced a financial crisis. It also requested a bailout package from the IMF in order to increase its foreign reserves.
It has taken advantage of the IMF programme and is now likely to receive US$2.8 billion by the end of August in order to increase its foreign exchange reserves.
This year, the government requires billions of dollars. It has also obtained loans from several countries such as China.
It also expects to receive $2.8 billion from IMP to supplement reserves and pay interest and principal on internal and external debts.
