Pakistan reaches agreement with IMF to resume loan

Pakistan has reached a staff-level agreement with the International Monetary Fund, a milestone that would pave the way for the release of an additional $1.2 billion in loans and unlock more funding.

The IMF will also consider an extension of the facility to end-June 2023, it said in a statement. The accord will make additional funds available once the board approves, taking the extended loan facility with Pakistan to about $7 billion, it said.

Funds from the IMF will help avert a potential default, and pave the way for more aid from other multilateral institutions and friendly nations. Pakistan needs at least $41 billion in the next 12 months to repay debt and fund imports as foreign-exchange reserves shrink to a level that could only cover less than two months of imports.

Pakistan’s rupee, dollar bonds and stocks rose as investors cheered the prospect of a bailout. The country requires at least $41 billion through June next year to keep the foreign-exchange stock at a “respectable” level and repay debts, the finance minister has said.



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