IMF Approves $500 Million Aid To Pakistan

The IMF approved nearly USD 500 million in its latest tranche of financial assistance to Pakistan.

A decision in this regard was taken by the Indian Monetary Fund Executive Board which completed the ninth review of Pakistan’s economic performance under a 36-month programme supported by an Extended Fund Facility (EFF) arrangement.

current affairsThe Executive Board’s decision enables the immediate disbursement of an amount equivalent to SDR 360 million (about USD 498.1 million), bringing total disbursements to SDR 3.6 billion (about USD 4.98 billion).

On September 4, 2013, the IMF had approved the three-year extended arrangement under the EFF in the amount of SDR 4.393 billion (about USD 6.64 billion at the time of approval of the arrangement, or 425 per cent of Pakistan’s quota at the IMF).

In completing the review, the Executive Board also approved the authorities’ request for waivers of non-observance of the end-September 2015 performance criteria on the ceiling on overall budget deficit and the ceiling on net domestic assets of the State Bank of Pakistan (SBP).

The IMF, also known as the Fund, was conceived at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944. The 44 countries at that conference sought to build a framework for economic cooperation to avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.

The IMF’s responsibilities: The IMF’s primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other.

The Fund’s mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.