IMF approves $1.1 billion as bailout package for crisis-hit Pakistan

The International Monetary Fund has approved an immediate disbursal of $1.1 billion loan tranche for Pakistan, the agency said in a statement. This concludes the second bailout package for the crisis-hit nation.

This funding is also the third and last installment of a $3 billion standby arrangement made with the IMF. The loan from IMF is crucial for Pakistan to stave off a sovereign default and comes at a time when the existing arrangement is set to expire this month.

“To move Pakistan from stabilization to a strong and sustainable recovery the authorities need to continue their policy and reform efforts, including strict adherence to fiscal targets while protecting the vulnerable; a market-determined exchange rate to absorb external shocks; and broadening of structural reforms to support stronger and more inclusive growth,” IMF said in a statement.

IMF loan to Pakistan

The IMF Executive Board approved Pakistan's request for the release of funds following discussions in Washington.

Pakistan and IMF reached a staff-level agreement on the final review of the $3 billion bailout package last month. Two tranches are already released with $1.2 billion disbursed in July and an additional $700 million in January 2024.

Meanwhile, as per ANI Pakistan is now looking for a more substantial IMF loan over a longer duration. Finance Minister Muhammad Aurangzeb has indicated that Islamabad could secure a staff-level agreement on the new program as early as July.

To bolster macroeconomic stability and implement much-needed structural reforms, Pakistan is focussing on securing a loan spanning at least three years. This comes a day after Pakistan Prime Minister Shehbaz Sharif met with IMF Managing Director Kristalina Georgieva in which he reportedly emphasised his administration's dedication to implementing structural reforms, ensuring fiscal discipline, and pursuing prudent policies for sustained economic growth.

Also Watch: Pakistan Economic Crisis: Support from IMF set to continue