Pakistan agreed for a three-year bailout package of $6 billion with the International Monetary Fund, aimed at shoring up fragile public finances and strengthening a dwindling economy, officials said Sunday.
The deal, which Prime Minister Imran Khan was a vociferous critic of before taking office and vowed not to turn to it for assistance, has been compelled to seek IMF support, marking the 13th such bailout since 1980s. The IMF board in Washington yet to approve the deal.
Khan’s government came to power last year determined to avoid another bailout; and initially sought billions of dollars in funding from friendly countries including China, Saudi Arabia and the United Arab Emirates.
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But with inflation climbing to over 8 percent, the rupee losing a third of its value over the past year, and foreign exchange reserves barely enough to cover two months of exports, it was forced to turn to the IMF, Reuters reported.
“Pakistan is facing a challenging economic environment, with lackluster growth, elevated inflation, high indebtedness, and a weak external position,” the IMF said in a statement outlining the framework deal, as Reuters quoted.
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