The State Bank of Pakistan (SBP) on Friday said it had received a $1 billion tranche from the International Monetary Fund (IMF) under a new programme amid the government winning more financing assurances from China, Saudi Arabia and the United Arab Emirates that go beyond a deal to roll over $12bn in bilateral loans owed to them.

A statement from the SBP said that following the IMF Board’s approval of the 37-month $7bn Extended Fund Facility, the bank received the first tranche of special drawing rights (SDRs) worth 760 million from the Fund today.

“These inflows will be reflected in SBP liquid reserves to be released on October 3,” the statement said.

SDRs are international reserve assets created by the IMF in 1969 and are allocated to member states to supplement existing official reserves.

IMF Pakistan Mission Chief Nathan Porter declined on Thursday to provide details of additional financing amounts committed by the three countries but said they would come on top of the debt rollover.

“I won’t go into the specifics, but UAE, China and the Kingdom of Saudi Arabia all provided significant financing assurances joined up in this programme,” Porter told reporters on a conference call.

The IMF’s Executive Board on Wednesday approved a new $7bn, 37-month loan agreement for Pakistan that requires “sound policies and reforms” to strengthen macroeconomic stability.

The approval releases an immediate $1bn disbursement to the country, which has had 22 previous IMF bailout programs since 1958.

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Porter said Pakistan has staged a “really remarkable” economic turnaround since mid-2023, with inflation down dramatically, stable exchange rates and foreign reserves that have more than doubled.

“So what we’ve seen is the benefits of undertaking good policies,” Porter said, adding that the challenge now was to build stronger and sustained growth by keeping monetary, fiscal and exchange rate policy consistent, raising more taxes and improving public spending.

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Last year, Pakistan achieved its first primary budget surplus in 20 years, and the programme calls for growing that to 2 per cent of gross domestic product.

Porter said it depends in part on reforms to improve collections from under-taxed sectors such as retailers.

The next review of the loan would likely take place in March or April of 2025, based on end-2024 performance criteria, Porter said.

‘Very productive’ meeting with PM Shehbaz: IMF managing director

Meanwhile, IMF Managing Director Kristalina Georgieva called her meeting with Prime Minister Shehbaz Sharif on Thursday “very productive”.

“We discussed Pakistan’s new Fund-supported program helping ongoing recovery, disinflation, increased tax fairness, and reforms to create new jobs and inclusive growth,” she said in a post on X.