ISLAMABAD: The Executive Board of the International Monetary Fund (IMF) has approved a purchase for Pakistan under the Rapid Financing Instrument (RFI) equivalent to SDR 1,015.5 million (US$ 1.386 billion, 50% of quota) to meet the urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic.

While uncertainty remains high, the near-term economic impact of COVID-19 is expected to be significant, giving rise to large fiscal and external financing needs.

The IMF support will help provide a backstop against the decline in international reserves and provide financing to the budget for targeted and temporary spending increases aimed at containing the pandemic and mitigating its economic impact.

This development along with potential debt repayment relieves as well as deferrals (Pakistan pays about US$ 1.0bn per month on average in foreign debt repayment), should significantly support country’s externals and the currency parity, going forward.

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