The International Monetary Fund has approved the immediate release of $501 million to Pakistan under a 3-year Extended Fund Facility, lauding the government’s efforts for fiscal consolidation and widen the tax net.
The Executive Board of the Fund met in Washington on June 27 and accorded approval to the 11the review of Pakistan’s economic performance. The quarterly review is needed to approve the next tranche of the $6.6 billion loan, IMF approved in 2013 to help the country avert a balance of payment of crisis.
“The economic recovery has gradually strengthened and short-term vulnerabilities have further receded on the back of improved macroeconomic stability and progress on structural reforms,” the Deputy Managing Director of the fund, Mitsuhiro Furusawa, said in a statement. ““The authorities are on track to achieve their program’s end-year fiscal targets, and their commitment to continue with gradual fiscal consolidation in FY2016/17 is welcome.
With the new release, Pakistan has received a total of $6.01 billion.
“Foreign exchange reserves have been progressively rebuilt under the program, and the continued accumulation of international reserves will further bolster external buffers and reduce vulnerabilities.”
The IMF called for maintaining a prudent monetary policy to sustain the macroeconomic stability while lauding the progress in strengthening autonomy of the central bank.
“Advancing financial sector reforms is important to reinforce financial sector stability and development. Important steps include moving ahead with establishing a deposit insurance scheme and strengthening the regulatory and supervisory framework,” the Board said in the statement.