Pakistan gets $7.6 bn IMF rescue fund

Islamabad, Nov 25: International Monetary Fund aka IMF in its first intervention since the beginning of the ongoing global financial turmoil has approved a $7.6 billion rescue fund for Pakistan, which in turn will help the country in its economic stabilisation programme.

An amout equivalent to $3.1 billion will be made available immediately to Pakistan and the remaining will be phased in as per the approval of IMF's Executive Board. This will be subjected to quarterly reviews in a 23-month stand-by arrangement. Board approved the arrangement under IMF's fast-track Emergency Financing Mechanism procedures. IMF said in a statement that through this assistance it aims to achieve the key objectives of restoring macro-economic stability, to ensure social stability, adequate support for the poor in Pakistan.

The IMF intervention in Pak economy was the result of worsening macro-economic situation singnificantly since mid-2007. It cited that the adverse security developments, large exogenous price shocks, increase in oil and food import prices, ongoing global financial crisis, instability in the economy during the transition to the new government led to slower growth rate and higher inflation in Pakistan.

The programme initiated by the government with support from the IMF envisages a significant tightening of fiscal policy. Pakistan has a quota of Special Drawing Rights of about $1,526.6 million. It became a member in IMF in 1950.