IMF Approves $6.7 bln Loan for Pakistan
TEHRAN (Tasnim) - The International Monetary Fund's board approved a $6.7 bln loan package for Pakistan to help the South Asian nation revive its ailing economy.
In a statement, the IMF said the three-year program should help Pakistan rebuild its reserves and prevent a crisis in the balance of payments. IMF loans generally come with conditions for economic reform and should encourage other donors to step in with more funds.
Two top finance ministry officials in Pakistan announced the Fund's approval of a package in August, pending the board's decision and Pakistan's progress on fiscal reforms, Al Jazeera reported.
The new loan will arrive just in time. As of August, the central bank had only about $5 bln left in foreign currency reserves, enough to cover less than five weeks of imports.
The Asian Development Bank, one of Pakistan's major lenders, estimates that Pakistan needs $6 billion to $9 billion to meet its obligations, including about $5 bln in outstanding debt on an earlier $11 bln IMF loan package.
Pakistan averted a balance of payments crisis in 2008 by securing the $11 bln IMF loan. This was suspended two years ago after economic and reform targets were missed.