Pakistan to Get $2.6b From IMF Under SDR, Fitch Ratings
IMF proposed $650 billion SDR allocation for member countries aimed to overcome the covid-19 crisis
American credit rating agency, Fitch Ratings, issued a report that said Pakistan is likely to get $2.8 billion funding from the International Monetary Fund (IMF) under new allocation of special drawing rights (SDR) that would reduce downside risks to the country’s credit ratings.
IMF proposed a $650 billion SDR allocation for member countries aimed to overcome the covid-19 crisis.
The agency expects the IMF board of governors to approve allocation in August.
Read Also
Businessmen & Traders Dissatisfied With Budget Even on Passage Day
The Fitch Ratings also said that Pakistan has benefited from the disbursement of IMF funding under its Extended Fund Facility (EFF).
It added that all six of the frontier markers should benefit from the new allocation.
“All six frontier markets should benefit from the expected new allocation of special drawing rights by the IMF. Most notably, it could bolster Sri Lanka’s reserves by $780 million and by $2.8 billion in Pakistan,” Fitch Ratings said in a report.
It also maintained that the country has benefitted from Saudi Arabia’s recent agreement regarding oil assistance package that could be worth up to $1.5 billion.
Fitch Ratings also maintained that Pakistan raised funds from the international market to help ease external liquidity issues.
“In Pakistan, the government’s adherence to a market-determined exchange-rate regime will continue to serve as a shock-absorber, and should help keep the current-account deficit contained,” said Fitch Ratings.
The surge in remittance inflows, import compression, and low average oil prices were behind the dip in the current account deficit.
