The State Bank of Pakistan (SBP) has received $2.75 billion from the International Monetary Fund (IMF) — as part of Special Drawing Rights (SDR) allocation announced by the fund recently — the central bank confirmed.
“SBP has received US$2.75 billion from the IMF, as part of SDR allocation announced by IMF recently,” the central bank tweeted Tuesday morning.
Pakistan was due to receive the amount on August 23 from IMF’s general allocations of $650 billion that had been approved to boost global liquidity amid the coronavirus pandemic across the globe.
The amount was directly transferred to the SBP, which has further improved the country’s foreign exchange reserves and is expected to have good impact on the economy.
The Board of Governors of the IMF had approved a general allocation of SDRs equivalent to $650 billion on August 2, 2021 — to boost global liquidity.
According to IMF statement, the allocation would benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy.
It would particularly help most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.
Meanwhile, IMF Managing Director, Kristalina Georgieva said in a statement that the allocation was a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis.
“The SDR allocation will provide additional liquidity to the global economic system – supplementing countries’ foreign exchange reserves and reducing their reliance on more expensive domestic or external debt. Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis,” she said.
She said that SDRs were being distributed to countries in proportion to their quota shares in the IMF. This means about US$275 billion is going to emerging and developing countries, of which low-income countries will receive about US$21 billion – equivalent to as much as 6 percent of GDP in some cases.
“SDRs are a precious resource and the decision on how best to use them rests with our member countries. For SDRs to be deployed for the maximum benefit of member countries and the global economy, those decisions should be prudent and well-informed,” she added.
The IMF will also provide regular updates on all SDR holdings, transactions, and trading – including a follow-up report on the use of SDRs in two years’ time, she added.