International Monetary Fund approves $1.1 billion in assistance for Pakistan

In the midst of talks for a fresh loan, the International Monetary Fund announced in a statement that its executive board had authorised $1.1 billion in assistance for Pakistan on Monday.

The money is part of a $3 billion standby agreement with the IMF that Islamabad obtained last summer in an effort to prevent a sovereign default. It is the second and last tranche of the agreement.

The permission was given the day after Shehbaz Sharif, the prime minister of Pakistan, had a discussion on the fringes of the World Economic Forum in Riyadh with Kristalina Georgieva, the managing director of the IMF, about a new loan programme.

This month marks the expiration of the present standby arrangement, thus Islamabad is looking to enter into a new, longer-term Extended Fund Facility (EFF) deal with the fund.

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Pakistan’s Finance Minister, Muhammad Aurangzeb, has said Islamabad could secure a staff-level agreement on the new program by early July.

Islamabad says it is seeking a loan over at least three years to help achieve macroeconomic stability and execute long-overdue and painful structural reforms.

Aurangzeb has declined to give details on the amount the country is seeking.

Islamabad is yet to make a formal request, but the Fund and the government are already in discussions.

If secured, it would be Pakistan’s 24th IMF bailout.

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