Pak to get $7.6-billion loan from IMF

The International Monetary Fund has approved a $7.6-billion loan for Pakistan designed to help it stabilize its economy and expand its social safety net.

The International Monetary Fund on Monday (IMF) has approved a $7.6-billion loan for Pakistan designed to help it stabilize its economy and expand its social safety net.

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"By providing large financial support to Pakistan, the IMF is sending a strong signal to the donor community about the country's improved macroeconomic prospects," IMF Deputy Managing Director Takatoshi Kato said in a statement.

The 23-month stand-by loan will give Islamabad $3.1 billion immediately and the rest of the money will be phased in over the course of the period, the IMF said.

The loan comes in response to the depreciation of the currency, a large deficit, rising inflation and a decline international reserves, Kato said.

The programme seeks to reduce the deficit and eliminate State Bank of Pakistan financing of the government, while at the same time increasing spending on social and development efforts.

Pakistan is to tighten its fiscal policy and monetary policy, phase out energy subsidies, change its tax policies, and better prioritize development spending.