22nd November, 2021
The International Monetary Fund (IMF) has agreed to revive a six billion dollar bailout package for Pakistan, a move that will help the country to stabilize its crumbling economy.
Pakistan secured the bailout package in 2019 to rescue the economy from a balance of payment and fiscal deficit crises but the loan was suspended twice after the payment of only three tranches.
A sum of 500 million dollars was paid earlier this year before the latest suspension due to Pakistan’s failure to implement an economic reform agenda.
The IMF said in a statement on Monday, that it had reached a staff-level accord with Pakistan to revive the package.
The statement said payment of another tranche would, however, be subject to approval by the fund’s executive board and Islamabad’s actions to implement more reforms.
The development is seen as a vital boost for Pakistan to revive its crumbling economy in the face of a spike in global energy and commodities prices.
The IMF had asked Pakistan to adopt a market-based exchange rate instead of the central bank’s control on the forex market.
Some of the reforms were implemented since the deal was signed but privatization and ending subsidies remained elusive due to political pressures.
The IMF agreement comes weeks after long-term ally Saudi Arabia announced to place three billion dollars in Pakistan’s central bank to help it maintain depleting reserves at a safe level.