IMF Approves $1.1 Billion Funding For Pakistan Amid Talks On New Bailout Package

The executive board of the International Monetary Fund has approved $1.1 billion in funding for cash-strapped Pakistan, according to a statement released by the agency on Monday (29 April).

This move comes amid the ongoing discussions regarding a new loan for the country.

The funding is the second and last tranche of a $3 billion standby arrangement with the IMF, which Islamabad secured last summer to help avert a sovereign default, Hindustan Times reported.

The approval came a day after the talks held between Pakistan Prime Minister Shehbaz Sharif and IMF Managing Director Kristalina Georgieva regarding a potential new loan programme.

These discussions took place on the sidelines of the World Economic Forum in Riyadh, Saudi Arabia.

Pakistan is aiming for a larger long-term Extended Fund Facility (EFF) agreement with the IMF as the current standby arrangement is set to expire this month.

Muhammad Aurangzeb, Pakistan's Finance Minister, has indicated that Islamabad could finalise a staff-level agreement on the new programme as early as July.

The purpose of seeking this loan, spanning at least three years, is to help achieve macroeconomic stability and execute long-overdue and painful structural reforms.

However, specific details regarding the loan amount being sought have not been disclosed by Aurangzeb.

Although a formal request from Islamabad is pending, discussions between the IMF and the Pakistani government are already underway.

If successful, this would mark Pakistan's 24th IMF bailout.

The country's $350 billion economy is grappling with a long-term balance of payments crisis, compounded by the need to repay nearly $24 billion in debt and interest over the next fiscal year, an amount nearly three times higher than its central bank's foreign currency reserves.

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