Islamabad: The International Monetary Fund Executive board gave formal approval on Wednesday to a three-year, $6 billion loan package for Pakistan to rein in mounting debts and stave off a looming balance of payments crisis.
Board approval will allow immediate disbursement of around $1 billion, with the remainder to be phased in over the period of the programme, subject to quarterly review, the IMF said in a brief statement.
It said a full statement would be released later on Wednesday.
Prime Minister Imran Khan came to power last August deeply reluctant to turn to the IMF, which has provided more than 20 bailout packages to Pakistan over the decades. But mounting economic headwinds forced his government to turn to the fund.
With foreign exchange reserves shrinking to only $7.3 billion, less than the equivalent of two months worth of imports, and the budget deficit set to top 7 percent of gross domestic product this year, Pakistan faces tough economic medicine.
The central bank has slashed the rupee currency in a bid to rebuild official reserves and improve competitiveness, but this has piled more pressure on households already facing inflation running at almost 9 percent and soaring energy prices.
In addition, in a bid to cut public debt, the government has set ambitious tax and revenue plans under a budget passed last month.
Updated Date: Jul 04, 2019 09:14:00 IST