IMF yet to include Pakistan’s $7 billion EFF on Executive Board agenda

The International Monetary Fund (IMF) is yet to add Pakistan’s new 37-month Extended Facility (EFF) to the agenda for its Executive Board meetings scheduled till September 18, according to the Fund’s official website.

The upcoming meetings, scheduled for September 9, 13 and 18, do not include the $7 billion EFF deal reached with Pakistan, local media reported.

Earlier this year, Pakistan concluded a $3 billion Standby Arrangement (SBA) with the IMF, aimed at bolstering the country’s foreign exchange reserves and easing the strain on its external finances.

Following the completion of the SBA, Pakistan and the IMF team reached a staff-level agreement on a new 37-month EDF worth $7 billion on 12 July.

However, this agreement still requires the approval of the IMF’s Executive Committee, subject to Pakistan securing the necessary financing guarantees from its development and bilateral partners.

To meet these demands, the government is reportedly negotiating a $12 billion loan swap from key allies, including China, Saudi Arabia and the United Arab Emirates (UAE).

In addition, the government requested an additional $1.2 billion loan from Saudi Arabia to address the remaining $2 billion funding gap.

Finance Minister Muhammad Aurangzeb, in a recent televised address, expressed optimism that the IMF Executive Board would approve the new EFF on time as Pakistan is in advanced stages of securing external financing guarantees.

Pakistan’s current foreign exchange reserves held by the State Bank of Pakistan (SBP) stand at $9.44 billion — significantly higher than the $3.54 billion recorded in mid-June 2023, before the short-term facility was finalized of the IMF.

Despite improvements in its reserves, the IMF program remains vital to Pakistan’s economy, which has struggled to implement reforms without the structure provided by an IMF-backed initiative.