IMF approves $1.1bn loan tranche for Pakistan

RIYYADH  (  Web  News  )

The International Monetary Fund (IMF) approved a disbursement of $1.1 billion on Monday, concluding the second bailout package in eight years.

However, this successful completion came at a steep cost, resulting in severe inflation and a decelerating economy.

The sources also mentioned that Pakistan is expected to receive the loan payment later this week.

This payment will be the third and final installment of a $3 billion Stand-By Arrangement (SBA) with the IMF, which was agreed upon last summer to prevent a sovereign default and is set to expire this month.

The latest update follows a meeting between Prime Minister Shehbaz Sharif and IMF Managing Director Kristalina Georgieva in Riyadh the previous day.

In his first meeting with the IMF chief since being re-elected, PM Shehbaz discussed the possibility of Pakistan entering a new program with the IMF.

Pakistan is now hoping for a bigger loan programme worth $6bn to $8bn spanning over three to four years, as an IMF team is expected to arrive in Islamabad sometime next month to discuss the terms and conditions.

It is not just the Extended Fund Facility (EFF) with Pakistan also aiming at getting additional funding under climate financing – a request yet to be approved but will be deliberated upon during the upcoming talks.