In a statement, the SBP verified the news and said that the $705.6 million tranche was released on Tuesday, January 16, “following the successful completion of the first review by the Executive Board of IMF under Stand By Arrangement (SBA)”.
According to Chase Securities’ director of research Yousuf M. Farooq, “the tranche release is in line with market expectations.” “To maintain economic stability, Pakistan must maintain a strict fiscal policy. It must also enroll in a new EFF IMF program as soon as the SBA expires to guarantee the rollover of its external debt.
“With Pakistan reporting a current account surplus in December and a relatively stable currency, the economic situation has significantly improved.” Additionally, it will guarantee deflation in the upcoming months.
“The improvement of Pakistan’s relationship with the IMF and their satisfaction with Pakistan’s reforms is a great achievement, especially given where we were just six months ago,” stated Ali Farid Khwaja, Chairman of KTrade Securities Limited.
Beyond the financial inflows, Pakistan is now viewed as an investable country by other investors due to this signal of confidence. For this reason, overseas investors are also purchasing Pakistani equities.
The IMF is important for reasons other than financial gain. Since the reforms are difficult, the interim government deserves praise for making and carrying out these difficult decisions. For privatization plans to succeed, investor confidence must be restored, and this requires reforms to be implemented consistently.
The CEO of Alpha Beta Core, a financial consulting firm, Khurram Schehzad, concurred that the development was “expected” and added that the upcoming review would probably go “smoothly” as well.
“The new, larger IMF program under the new government with reforms on the agenda will be the challenge,” he continued.
