Karachi: The International Monetary Fund (IMF) has given Pakistan $2.75 billion as part of its new allocations for member nations to combat Covid-19 problems, according to the central bank.
The fresh cash infusion is anticipated to push the country’s foreign exchange reserves to a new high of $20.4 billion. The funds for Islamabad were given by the Washington-based global lender as part of its record financing of $650 billion for poor and developed member countries.
The additional allocations are intended to boost member nations’ foreign exchange reserves, allowing them to make international payments for imports and debt repayments while also speeding up global economic recovery from the effects of the current health crisis.
The inflows have boosted Pakistan’s ability to make foreign payments as well as its ability to halt the rupee’s present decline versus the US dollar and other major world currencies. The board of governors of the IMF approved a general allocation of Special Drawing Rights (SDRs) equivalent to $650 billion (about SDR 456 billion) on August 2, 2021 to boost global liquidity.
The State Bank of Pakistan (SBP) projected the current account deficit to increase to 2-3% of GDP in current fiscal year 2021-22 compared to 10-year low at 0.6% of GDP recorded in the prior fiscal year 2020-21. It, however, said the deficit at 2-3% is sustainable. This would allow the economy to grow by 4-5% in FY22 compared to 4% in FY21.