On Thursday, Pakistan received the first tranche of a $3 billion bailout from the International Monetary Fund (IMF), amounting to $1.2 billion, as announced by Finance Minister Ishaq Dar.
This financial boost follows the recent agreements between Islamabad and the IMF, which have also reassured other countries, leading to additional financial support from the United Arab Emirates and Saudi Arabia earlier this week.
What Happened: The first installment of the IMF bailout has been deposited into the State Bank of Pakistan’s account, The Economic Times reports.
This financial injection has had a positive impact on Pakistan’s economy, with the rupee gaining 1% against the dollar and the country’s sovereign dollar bonds also seeing an increase.
A bond maturing in 2027 hit a 10-month high, while a 2024 maturity reached its highest point in over a year.
Why It Matters: This financial support comes at a crucial time for Pakistan, which was on the brink of a sovereign debt default.
The IMF bailout and additional support from the UAE and Saudi Arabia have not only prevented this but also boosted the country’s economy.
As Benzinga previously reported, the announcement of the IMF deal led to a surge in Pakistan’s benchmark share index, the KSE 100. Furthermore, Pakistan is set to become the fourth largest IMF borrower in the world after receiving an additional $3 billion in loans over the next nine months.
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