State Bank of Pakistan on Wednesday confirmed it had received US$1.39 billion from the International Monetary Fund (IMF) under the Rapid Financing Instrument to address the economic impact of the coronavirus.
“SBP has received $1.39bn under Rapid Financing Instrument by the IMF,” said the central bank in a statement on Twitter.
Pakistan has recorded over 200 deaths and experts have voiced fear that the country of 215 million people could see a rapid and devastating increase due to its shortage of medical infrastructure and crowded cities.
With this in view, 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 full-fledged reform programme that undergoes review.
“While uncertainty remains high, the near-term economic impact of COVID-19 is expected to be significant, giving rise to large fiscal and external financing needs,” the international lender had said in a statement.
“The domestic containment measures, coupled with the global downturn, are severely affecting growth and straining external financing,” said Geoffrey Okamoto, the IMF’s first deputy managing director.
“This has created an urgent balance of payments need,” he said.
The IMF official, at the time, had voiced support for actions taken in Pakistan including a boost in spending on public health and the social safety net to brace for a worsening crisis.
“In response to the crisis, the government of Pakistan has taken swift action to halt the community spread of the virus and introduced an economic stimulus package aimed at accommodating the spending needed to tackle the health emergency and supporting economic activity. Crucially, the authorities are increasing public health spending and strengthening social safety net programs to provide immediate relief to the most vulnerable,” Okamoto said.
He also credited the central State Bank of Pakistan with measures that have included lowering its benchmark rate and supporting liquidity.
Pakistan is a longtime recipient of help from the IMF and is already the recipient of a three-year, $6 billion programme that was approved last year.
Okamoto said Pakistan needed to recommit to its goals under the package once the crisis abates, including restoring its public finances and governance.