"The Executive Board of the International Monetary Fund (IMF) approved a purchase of Pakistan under the Rapid Financing Instrument (RFI) equivalent to SDR 1,015.5 million (US$ 1.386 billion, 50 percent of quota) to meet the urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic", the release said on Thursday.
The IMF explained that the near-term economic impact of COVID-19 is expected to be significant, giving rise to large fiscal and external financing needs.
"The IMF support will help to provide a backstop against the decline in international reserves and provide financing to the budget for targeted and temporary spending increases aimed at containing the pandemic and mitigating its economic impact", the release said.
As the impact of the COVID-19 shock subsides, the IMF and Pakistan will resume discussions as part of the current Extended Fund Facility, which provides long term aid to support structural reforms needed to address the long-term balance of payments difficulties, the release added.
The release also credited the State Bank of Pakistan with enacting a related set of measures, including lowering interest rates and establishing refinancing facilities to safeguard the nation’s financial stability - measures that the IMF said should be temporary.
As of today, Pakistan has near 7,000 confirmed COVID-19 cases and 128 disease-related fatalities, the local government reports.
