The International Monetary Fund (IMF) on Thursday completed its first review of Pakistan’s economic reform programme supported by a $3 billion Stand-By Arrangement (SBA) and allowed the immediate disbursement of $700 million, according to the finance ministry.

A statement from the ministry said the completion of the first review by the IMF’s Executive Board and the payment of 528m in special drawing rights brought the total disbursements under the SBA to $1.9bn.

“IMF funding along with recent inflows from multilateral lenders will further help the Pakistani rupee, that is fairly stable [over the] last few months,” said Mohammad Sohail, CEO of Topline Securities.

He added that this new tranche would help Pakistan in getting rollovers from allied countries such as the United Arab Emirates, China and Saudi Arabia and ease external debt repayment pressure.

In June 2023, the IMF Executive Board had approved the much-needed nine-month arrangement with Pakistan “to support its economic stabilisation programme”. The approval had allowed for an immediate disbursement of $1.2bn, with the rest to be phased over the programme’s duration — subject to two quarterly reviews.

The current IMF programme is expected to conclude in the second week of April. The initial tranche of $1.2bn was released in July.

In November 2023, a Staff-Level Agreement was reached between the IMF staff and Pakistani authorities regarding the first review under Pakistan’s SBA. This agreement was contingent upon approval by the IMF’s Executive Board.

Pakistan is now more likely to receive the remaining amount in March under the $3bn SBA.

However, caretaker Finance Minister Shamshad Akhtar had already informed the nation that the country needs to enter a new agreement with the IMF for the support of the economy. There is no hope that Pakistan could say goodbye to the lending agency. Despite tough conditions, Pakistan is still facing very high inflation which clocked in at 29.7 per cent for December from 29.2pc in the preceding month.

The latest data reveals that Pakistan has engaged in 24 arrangements with the IMF since becoming a member on July 11, 1950. This underscores the country’s historical reliance on IMF support to address economic challenges.

Additional input from Reuters.