The International Monetary Fund (IMF) has deposited $1.2 billion into the State Bank of Pakistan (SBP), announced Finance Minister Ishaq Dar on Thursday, another much-needed boost to the economy reeling from dollar shortage and runaway inflation.

“I would like to share the information that the IMF has deposited $1.2 billion upfront payment in the account of SBP,” said Dar in a news briefing.

“Last night, the IMF Executive Board approved the Stand-By Arrangement (SBA).

“Under the agreement, Pakistan received an instalment of $1.2 billion and the remaining $1.8 billion would be disbursed after two reviews, which will be held in November and February.

“This would boost foreign exchange reserves, and after this week’s closing on Friday, SBP reserves would have increased by $4.2 billion,” he said.

“I also expect Pakistan’s reserves will close at $14 billion tomorrow,” he said.

Dar lauded the role of Prime Minister Shehbaz Sharif over his engagement with the IMF, which resulted in the inking of an SBA.

“The SBA has been limited to nine months, so a new government formed after elections can make its own decisions.”

“I believe that Pakistan is moving on a positive trajectory and we need to consolidate these gains,” he added.

Saudi Arabia deposits $2bn in SBP: Ishaq Dar

The development comes after the IMF’s Executive Board on Wednesday approved a nine-month Stand-By Arrangement (SBA) for Pakistan for an amount of $3 billion. The Board’s approval allows for immediate disbursement of SDR894 million (or about US$1.2 billion).

The Fund stated that Pakistan’s’ economic reform programme aims to support immediate efforts to stabilise the economy and guard against shocks while creating the space for social and development spending to help the people of Pakistan.

Pakistan, which has been teetering on the edge of default due to an acute foreign currency shortage, also got $1 billion from the United Arab Emirates and $2 billion from Saudi Arabia earlier this week.