Saturday, May 15, 2010

The International Monetary Fund (IMF) said yesterday that its board has approved a loan package worth US$1.13 billion to be granted to Pakistan.

The move came after the IMF reviewed Pakistan’s economic performance with a standby arrangment worth $11.3 billion aimed at improving the country’s balance of payments. According to a statement by the fund, disbursements have reached $7.27 billion from the plan.

The IMF described Pakistan’s economic situation as having improved in spite of “adverse security developments and a rapidly changing political environment”, although saying the economy was still vulnerable.

The board also noted that it would grant waivers for several performance criteria Pakistan did not meet, namely overrunning the budget deficit and surpassing State Bank of Pakistan borrowing limits.

Pakistan requested a bailout package two years ago from the IMF, as it was struggling with three-decade-high inflation rates; the country has also seen much violence from rebel groups, with bombings having killed over 3,200 people since July of 2007.