Cash-strapped Pakistan seeking 24th bailout from IMF, approves $1.1 billion
Pakistan and the IMF have reached a preliminary agreement for the release of $1.1 billion from a $3 billion bailout package, following days of intense negotiations in Islamabad
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Pakistan and the International Monetary Fund (IMF) have reached a preliminary agreement for the release of $1.1 billion from a $3 billion bailout package, following days of intense negotiations in Islamabad, the IMF announced on Wednesday (20 March).
The agreement marks a crucial step for Pakistan, which has been grappling with severe economic challenges and the threat of defaulting on its debt repayments.
The International Monetary Fund (IMF) in its end-of-mission statement on Wednesday said the cash-strapped country "expressed interest in a successor medium-term Fund-supported programme to permanently resolve Pakistan's fiscal and external sustainability weaknesses, strengthening its economic recovery, and laying the foundations for strong, sustainable, and inclusive growth", Dawn News reported.
It said the global lender's team reached a staff-level agreement with the Pakistani authorities on the second and final review of Pakistan's stabilisation programme supported by the IMF's USD 3 billion standby arrangement approved in July last year.
The talks, led by Pakistan's Finance Minister Muhammad Aurangzeb and the IMF's mission chief to Pakistan, Nathan Porter began last Thursday (14 March).
The statement said subject to the approval of its executive board, the staff-level agreement would enable Pakistan to access about USD 1.1 billion -- 828 million special drawing rights (SDR) -- by late April.
Pakistan's new finance minister Muhammad Aurangzeb, who assumed charge last week, had said that his priority was to start negotiations with the Washington-based IMF to bail out the country from its financial woes.
Last year, the IMF Executive Board approved the USD 3 billion Stand-By Arrangement (SBA) for Pakistan, the term for which is set to expire next month. So far, two tranches have been issued while the last one is pending the review of the conditions set by the lender. Last year, the timely support by the IMF helped the country to avoid a potential default on its external liabilities.