Sigh of relief for a Pakistan as IMF revives bailout program after long months long efforts
The Pakistani rupee surged against the US dollar Tuesday. During intraday trade after the International Monetary Fund’s (IMF) executive board revived the much-awaited bailout program for Islamabad.
The rupee rose 2.42 against the US dollar to 219.50. During intraday trading on the interbank market from Monday’s close of 221.92.
After months of desperate efforts. Global moneylenders have approved the seventh and eighth reviews of the stalled $6 billion Pakistan program, government officials said Monday night.
Zafar Paracha told
Exchange Companies Association of Pakistan (ECAP) General Secretary Zafar Paracha told that he expects the local unit to keep appreciating and fall to 200 in the coming days.
Paracha highlighted that the deal materialized after a long delay. The government took some measures for fiscal tightening that led to an increase in smuggling.
Apart from the smuggling of dollars to Afghanistan. Paracha said that the heavy regulatory duties imposed on imports led to an increase in the smuggling of commodities — which resulted in a shortage of dollars.
He noted that although the amount from the global money lender amounted to $1.1 billion. It will pave the way for Pakistan to get additional funds from other multilateral and bilateral organizations.
Paracha said that foreign direct investment would also increase. Also expected that the overall economy would witness a boost in the coming days.
In a statement. The Fund announced that the executive board completed the combined seventh and eighth reviews of the “extended arrangement” under the Extended Fund Facility (EFF) for Pakistan.
“The board’s decision allows for an immediate disbursement of SDR 894 million (about $1.1 billion), bringing total purchases for budget support under the arrangement to about US$3.9 billion,” the statement read.
The global lender also approved to increase the loan size and extended it till June 2023.
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