The International Monetary Fund has agreed to relaunch a $ 6 billion bailout package for Pakistan after more than a month of discussions, providing respite for its faltering economy, even as the government will have to push through major reforms.
The International Monetary Fund said it reached a staff level agreement with Pakistan to review the loan. The agreement provides for the implementation of preliminary actions, in particular in report on financial and institutional reforms, before final approval by the IMF Executive Board.
The deal comes in one moment in which Pakistan’s economy is struggling with due to hyperinflation in part to the repressed demand, to the increase in global prices of materials prime and the increase in imports.
The Central Bank of Pakistan raised its benchmark interest rate last week more than expected, with the Pakistani rupee in 1.2% increase to 173.16 per dollar. Bonds too in The country’s dollars rose with the yield on bonds in expiration in 2031 in 33 basis points drop, the largest increase since it was issued in April.
“After a long and painful delay, Pakistan is finally back on track with its IMF program,” said Nicholas Yap, analyst at Nomura International. He added that this would help alleviate underlying concerns in light of the pressure on the country’s checking account and currency.
Pakistan has been trying to reach an agreement with the International Monetary Fund for more than a month, while it has yet to pass amendments that...
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