IMF approves $6bn loan

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international monetary fund

ISLAMABAD: In line with expectations, the International Monetary Fund’s (IMF) Executive Board approved the $6 billion loan package for Pakistan.
IMF spokesperson Gerry Rice tweeted, “IMF Executive Board approved today a three-year $6 billion loan to support Pakistan’s economic plan, which aims to return sustainable growth to the country’s economy and improve the standards of living.”
Pakistan and the IMF had already agreed on a deal at the staff level, however, the final approval was pending on conditions that the government had to meet.
The IMF is expected to release the first tranche of $500 million in the current month.
Adviser to PM on Finance Abdul Hafeez Shaikh also confirmed the news on twitter.
“IMF Board approved a $6 billion Extended Fund Facility (EFF) for Pakistan to support our economic reform program. Our program supports broad based growth by reducing imbalances in the economy. Social spending has been strengthened to completely protect vulnerable segments.”
After coming to power, the Pakistan Tehreek-e-Insaf (PTI) government raised the prices of gas and electricity twice – first time in anticipation of an IMF programme and second time as part of the IMF’s prior action to qualify for a $6-billion loan package. Other conditions to qualify for the bailout package included; hiking interest rates and a free float exchange rate.
An IMF mission led by Ernesto Ramirez Rigo had visited Islamabad from April 29 to May 11 to discuss a bailout package.
Pakistani authorities and the IMF team had at the conclusion of the visit reached a staff level agreement over a 39-month EFF for about $6bn.
The agreement had been subject to approval by the IMF’s executive board.
“The programme aims to support the [Pakistani] authorities’ strategy for stronger and more balanced growth by reducing domestic and external imbalances, improving the business environment, strengthening institutions, increasing transparency, and protecting social spending,” the IMF had said in a statement attributed to Rigo.