WASHINGTON: The International Monetary Fund (IMF) has approved a US$3 billion bailout package for cash-strapped Pakistan following months of talks with the South Asian country, which has been beset by economic misery for years, reported Xinhua.
The IMF’s Executive Board, which approved the deal on Wednesday, said the aid “aims to support immediate efforts to stabilise the economy and guard against shocks while creating the space for social and development spending to help the people of Pakistan”.
The pandemic, political instability, and last year’s flood disaster, which temporarily submerged a third of the country, have caused severe challenges.
Growth has slowed, inflation has soared and foreign currency reserves have fallen, raising the prospect of Pakistan defaulting on its international liabilities.
The IMF aid will be dispersed over nine months.
Pakistan got initial approval from the global lender in June. It recently received financial support from Saudi Arabia and the United Arab Emirates, helping to ease the crisis.
In return for the aid, the IMF asked Pakistan to raise energy prices for consumers, let go of the control over currency value, improve tax collection and tighten monetary policy. -Bernama
