Crisis-hit Pakistan has reached a staff-level agreement with the International Monetary Fund (IMF) over $3bn (£2.4bn) of funding.
The deal, which still needs to approved by the global lender’s board. This comes after an eight-month delay.
The South Asian nation is facing its worst economic crisis since independence from Britain in 1947.
To help secure the deal, Pakistan’s central bank raised its main interest rate to a record high of 22% on Monday.
Pakistan’s economy, which already struggling after years of financial mismanagement. This has been pushed to the brink by a global energy crisis and devastating floods that hit the country last year.
“The economy has faced several external shocks such as the catastrophic floods in 2022.
It impacted the lives of millions of Pakistanis and an international commodity price spike in the wake of Russia’s war in Ukraine.
” Nathan Porter, IMF’s mission chief for Pakistan said.
Pakistan‘s annual inflation rate hit a fresh record high in May of almost 38%.
The $3bn of funding, which will spread over nine months, is higher than expected.
Pakistan was awaiting the release of the remaining $2.5bn from a $6.5bn bailout package agreed in 2019, which expired on Friday.
The nation of more than 230 million people has been struggling for years to stabilise its economy.
This year the country’s foreign exchange reserves fell to a level. It covered less than three weeks of imports.
Separately, donors from around the world have pledged more than $9bn to help Pakistan recover from devastating floods that hit the country in 2022.
