International Monetary Fund has released the first installment of loan worth 540 million dollars to Pakistan.
The International Monetary Fund had approved a $6.7 billion loan for Pakistan in an effort to help the strategic country stave off an economic crisis.
The country has also been facing a growing economic crisis with its foreign currency reserves severely depleted over the past two years. The IMF said the loan is expected to help the economy rebound, rebuild reserves and support structural changes aimed at boosting investment and growth.
The international lending agency’s approval allows the release of a first installment of $540 million with the remainder of the loan to be paid out over three years.
To secure the loan, Pakistan had to commit to changes in the economy designed to increase growth and improve financial stability. The measures aim to bring down the deficit, reduce pervasive electricity shortages and increase the country’s poor rate of tax collection.
The agreement comes less than six years after Pakistan’s last IMF bailout, and the driving need for the money this time was to repay the institution nearly $5 billion that Islamabad still owes.