IMF approves second tranche of $6bn facility to Pakistan

KARACHI: International Monetary Fund (IMF) expressed satisfaction over Pakistan’s economic performance and agreed on next steps, paving the way for release of $450 million tranche of the US$6 billion, three-year loan package.

Once the IMF board gives the go ahead, the Fund will provide US$450 million, on top of the US$1 billion released in July.

“Despite a difficult environment, program implementation has been good, and all performance criteria for end-September were met with comfortable margins,” IMF mission chief Ernesto Ramirez Rigo said in a statement.

The official, who led a team that spent two weeks in the country, pointed to signs of improving economic stability, including the move to a flexible exchange rate, and slowing inflation that is projected to fall under 12 per cent next year.

But he said more work was needed to target money laundering and on terror finance controls.

Approval of the first performance review of Pakistan’s policy program will also help unlock “significant funding from bilateral and multilateral partners.”

Under the loan program, the government agreed to slash civil expenditure and freeze military spending while promising to substantially raise revenues to stem a yawning fiscal deficit, and pledging to collect 5.5 trillion rupees (US$36 billion) in taxes.

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