IMF reaches deal with Pakistan that could unlock $1.21 billion — Channel NewsAsia

The International Monetary Fund has reached a staff-level agreement with Pakistan on reviews of certain lending programs. If the IMF Executive Board approves the agreement, the country could receive about $1.21 billion in financing.

Funds under two programs

As Channel NewsAsia reports, Pakistan could receive about $1 billion under the Extended Fund Facility program. Another $210 million is envisaged under the Resilience and Sustainability Facility climate program.

If the disbursements are approved, the total amount transferred to Pakistan under the two programs will reach about $5.7 billion. The country continues to depend on external financing to replenish its foreign exchange reserves and meet its debt obligations.

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IMF assessment and risks

The IMF said that with the support of the Extended Fund Facility program, Pakistani authorities had been able to overcome the consequences of the conflict in the Middle East, while effective policies helped maintain macroeconomic stability.

At the same time, the fund noted that risks remain high due to geopolitical tensions, volatile energy prices, tighter global financial conditions and trade disruptions. Ahmad Mobeen, chief economist at S&P Global Market Intelligence, previously described Pakistan as the most vulnerable major economy in the Asia-Pacific region in the event of a prolonged conflict in the Middle East because of its dependence on energy imports from Gulf countries, remittances and financial support from the region.