Pakistan gets first installment of $540mn loan from IMF

ISLAMABAD: Pakistan has received first installment of $540 million loan from International Monetary Fund (IMF) under new assistance program, Geo News reported.

Sources in the ministry of finance told Geo News that $540 million had arrived in State Bank of Pakistan within 48 hours after the approval of the loan program in IMF board meeting.

The IMF executive board authorised a three-year loan of $6.7 billion, making an initial $540 million available to the Pakistani authorities.

The remaining amount will be evenly paid out over the duration of the programme, subject to the completion of quarterly reviews, the Washington-based global lender had said.

The aid is an Extended Fund Facility, which is aimed at helping a country that faces serious balance-of-payments problems because of structural weakness that require time to address.
The repayment period for an EFF loan is between four-and-a-half and 10 years.

The loan is aimed at reducing Pakistan's fiscal deficit -- which neared nine percent of gross domestic product last year -- to a more sustainable level and reform the energy sector to help resolve severe power cuts that have sapped growth potential.

Pakistan abandoned a previous $11.3 billion IMF loan programme in 2011 after refusing to carry out strict financial reforms, and still owes about $4 billion to the Fund.