While the International Monetary Fund (IMF) will temporarily increase funding limits for member nations to help them overcome current financial challenges, at the same time, it is still locked over an unfinished loan program required for the ongoing economic crisis.
Under the fund’s General Resources Account, the annual limit will be raised to 200% of the quota for a period of 12 months from the current 145%, the financial agency said in an official statement.
The changes will provide member countries— access to funds without triggering the so-called exceptional access framework that entails tougher conditions. The measure follows its permission last month to five development lenders to use its reserves to help poor nations, Reuters reported.
According to the statement, the fund’s staff will re-engage the Executive Board before the end of the 12-month period on a proposal to maintain the higher limits for longer, should the circumstances warrant it.
The Pakistani government has been trying hard to fulfill all its demands to unlock the $1.1 billion bailout package, however, the officials revealed that the administration is quite nervous as it finds it difficult to convince the global lender for the funds. The country has increased policy interest rates, cut government expenses, etc.
Earlier on 4 March, Finance Minister Ishaq Dar said that the country is set to receive a $1.3 billion financing boost from the Industrial and Commercial Bank of China Ltd (ICBC) in the coming days. The fund will be used to help shore up Pakistan’s foreign exchange reserves as the country faces challenging economic conditions.
He reported that the State Bank of Pakistan (SBP) had $3.82 billion in foreign exchange reserves, which, when added to the sums held by commercial banks, totaled almost $9.26 billion.
The financial body has also asked Pakistan to give an assurance that its balance of payments deficit is fully financed for the fiscal year ending in June to unlock the next tranche of IMF funding.
