The approval revives the $6 billion IMF programme after it remained latent for over a year. The approval followed some tough decisions taken in Islamabad to stabilise the economy. The measures included a steep rise in electricity bills, imposition of Rs140 billion taxes and agreeing to grant unprecedented autonomy for the central bank.
The executive board of the IMF endorsed the staff-level agreement, reached between the government of Pakistan and the Fund’s team last month.
The board’s approval has paved the way for the release of $500m third loan tranche. Out of the $6bn, the IMF has already disbursed $1.45bn in two tranches, bringing the total disbursements to $2bn.