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The Pakistan State Bank confirmed on Wednesday that it had received $ 1.39 billion from the International Monetary Fund (IMF) under the Rapid Financing Instrument to address the economic impact of the coronavirus.
“SBP received $ 1.39 billion under the IMF’s Rapid Financing Instrument,” the central bank said in a statement on Twitter.
Pakistan has recorded more than 200 deaths and experts have expressed fear that the country’s 215 million people may see a rapid and devastating increase due to a shortage of medical infrastructure and crowded cities.
With this in mind, the IMF had approved the disbursement of the amount on April 17. The rapid financing instrument addresses emergencies and does not subject a country to a comprehensive reform program that is subject to review.
“While the uncertainty remains high, the short-term economic impact of COVID-19 is expected to be significant, generating large needs for fiscal and external financing,” the international lender said in a statement.
“Domestic containment measures, along with the global recession, are seriously affecting growth and putting pressure on external financing,” said Geoffrey Okamoto, first deputy managing director of the IMF.
“This has created an urgent need for balance of payments,” he said.
‘Quick action’
The IMF official, at the time, had expressed his support for actions taken in Pakistan, including an increase in spending on public health and the social safety net to prepare for a worsening crisis.
“In response to the crisis, the Pakistani government has taken swift steps to stop the spread of the virus to the community and introduced an economic stimulus package aimed at accommodating the spending necessary to deal with the health emergency and support economic activity. Crucially , authorities are increasing spending on public health and strengthening social safety net programs to provide immediate help to the most vulnerable, “Okamoto said.
It also credited the Central Bank of the State of Pakistan with measures that included lowering its benchmark rate and supporting liquidity.
Pakistan has long received IMF assistance and has already received a three-year, $ 6 billion program that was approved last year.
Okamoto said Pakistan must re-commit to its package goals once the crisis subsides, including restoring its public finances and governance.
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