The Executive Board of the International Monetary Fund (IMF) today approved—on a lapse-of-time basis¹—a nine-month extension of Pakistan’s Stand-By Arrangement (SBA), to September 30, 2011.

The extension will provide time to the Pakistani authorities to complete the reform of the General Sales Tax, implement measures to correct the course of fiscal policy, and amend the legislative framework for the financial sector. The IMF staff is continuing its dialogue with the Pakistani authorities on the program’s fifth review.

A 23-month SBA in an amount equivalent to SDR 5.1685 billion (about US$7.61 billion) was originally approved on November 24, 2008 (see Press Release No. 08/303). On August 7, 2009 the SBA was augmented to SDR 7.2359 billion (about US$10.66 billion) and extended through December 30, 2010 (see Press Release No. 09/281). Following the completion of the fourth review in May 2010, disbursements under the arrangement reached SDR 4.936 billion.

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¹ The Executive Board takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.