A vendor in Karachi. The International Monetary Fund IMF has hinted that it is likely to give monetary support to Pakistan in its fight against economic impact of coronavirus (CVID-19) outbreak. Image Credit: Reuters

Dubai: The International Monetary Fund (IMF) has hinted that it is likely to give monetary support to Pakistan in its fight against economic impact of coronavirus (CVID-19) outbreak.

“The authorities have continued their reform efforts to address Pakistan’s economic challenges, but progress is being threatened by the devastating effects of the COVID-19 outbreak and the deterioration in global economic and financial conditions,” Kristalina Georgieva, Managing Director of the IMF said in a statement.

Rapid Financing Instrument

To support the economy on the face of risks posed by COVID-19 and provide adequate relief to the people and the economy, the Government of Pakistan has requested financial assistance under the Fund’s Rapid Financing Instrument (RFI).

“This emergency financing will allow the government to address additional and urgent balance of payments needs and support policies that would make it possible to direct funds swiftly to Pakistan’s most affected sectors, including social protection, daily wage earners, and the healthcare system. Our team is working expeditiously to respond to this request so that a proposal can be considered by the IMF’s Executive Board as soon as possible,” said Georgieva.

The IMF chief commended Pakistan for the efforts it took to mitigate risks posed by the virus outbreak. The government has already approved an economic stimulus package aimed at containing the spread of the virus and providing support to affected families and businesses. Similarly, the State Bank of Pakistan has adopted a set of measures, including a lowering of the policy rate, new refinancing facilities to support the flow of credit, and temporary regulatory relief measures.

“In parallel, the authorities have reaffirmed their commitment to the reform policies included in the current arrangement under the Extended Fund Facility (EFF). These reforms are crucial to boost Pakistan’s growth potential to deliver broad based benefits for all Pakistanis, especially the most vulnerable segments of the population,” said Georgieva.

Ready for more support

The IMF said it stands ready to continue to support the authorities’ efforts to implement much-needed economic and structural reforms aimed at fostering strong and sustainable growth.

On March 4, the IMF had announced that it would support vulnerable countries with different lending facilities, including through rapid-disbursing emergency financing, which could amount up to $50 billion for low-income and emerging markets, reports Dawn news.

Of this, $10 billion is available at zero interest for the poorest members through the Rapid Credit Facility (RCF).

The IMF’s announcement comes as Pakistan recorded the biggest single-day jump in the number of confirmed coronavirus cases on Friday.

The country has registered 1,363 cases with 11 deaths.