The IMF has acknowledged the relief package of Rs. 1.2 trillion which was announced by the Pakistan government and stated that COVID-19 has been spreading rapidly in the country.
In its new publication Policy Tracker, the fund stated that both the federal and provincial governments have implemented a range of measures to delay and contain the spread of the virus.
This policy tracker summarizes the key economic responses governments are taking to limit the human and economic impact of the COVID-19 pandemic. The tracker includes 193 economies.
These included quarantining more than three thousand travelers from Iran, closing borders with neighboring countries, international travel restrictions, school closures, social distancing measures, and lockdowns in cities and provinces across the country. Pakistan army troops were deployed starting Monday, March 23, to help provincial governments in their measures to contain the spread of the virus.
IMF noted that a relief package worth Rs. 1.2 trillion has been announced by the authorities on March 24, 2020. The fund noted:
On the monetary and macro-financial side, the State Bank of Pakistan (SBP) has responded to the crisis by cutting the policy rate twice by a cumulative 225 basis points to 11.0 percent in less than two weeks in March 2020.
The IMF noted that on March 17, SBP announced two new refinancing facilities:
‘Temporary Economic Refinancing Facility’ (TERF) worth Rs. 100 billion in bank refinancing to stimulate investment in new manufacturing plants and machinery at 7 percent fixed for 10 years and the “Refinance Facility for Combating COVID–19” (RFCC) worth Rs. 5 billion to support hospitals and medical centers the purchase of equipment to detect, contain, and treat COVID-19.
The fund noted that SBP has taken temporary regulatory measures to maintain banking system soundness and sustain economic activity. These include: