IMF Approves US $7b Loan to Pakistan

The BBC is reporting that the International Monetary Fund, IMF, has approved a US $7 billion loan to cash-strapped Pakistan.

The country is due to receive a first tranche of US $1 billion immediately, with the balance to be paid out over the next three years.

Pakistan has taken more than 20 loans from the IMF since 1958 and is currently its fifth-largest debtor.

The IMF said the new programme will require sound policies and reforms to stabilise and help make the economy more resilient.

The South Asian nation has pledged that it would be the last loan from the international lender.

As part of the deal, Islamabad agreed to a number of unpopular measures, including increasing the amount of tax it collects from people and businesses.

The country has relied on IMF loans to meet its needs for decades and continued to struggle after years of financial mismanagement.

Last year, the country was on the brink of defaulting on its debts and had barely enough in foreign currencies to pay for a month of imports.