SBP confirms that IMF releases $700m tranche

The long-awaited $700 million installment from the International Monetary Fund (IMF) has been disbursed, providing a significant boost to the foreign reserves of the State Bank of Pakistan (SBP).

The SBP confirmed the release of the $705.6 million tranche on January 16, following the successful completion of the first review under the Stand By Arrangement (SBA) by the IMF Executive Board.

Analysts foresee the continuation of a strict fiscal policy for economic stability, underscoring the importance of a new IMF program after the SBA concludes to effectively manage external debt.

Positive economic indicators, including a current account surplus and currency stability, are anticipated to contribute to disinflation in the coming months, instilling investor confidence and positioning Pakistan as an attractive investment destination.

The approval from the IMF is seen as a vote of confidence, with analysts commending the interim government for its efforts in implementing challenging reforms.

Looking ahead, a smooth progression in the next review is expected, although analysts acknowledge the challenges associated with a larger IMF program under a new government.

Consistent implementation of reforms is highlighted as crucial to rebuilding investor confidence and ensuring the success of privatization plans.