IMF set to hold crucial board meeting on Pakistan bailout deal today

WASHINGTON: The International Monetary Fund (IMF) is all set to hold the Executive Board’s key vote on Pakistan’s $3 billion bailout programme today, a person familiar with the matter told Bloomberg.

Islamabad signed a short-term IMF deal on June 30 under a standby arrangement, under which the nation is set to receive $3 billion over nine months, subject to approval by the IMF’s board.

Pakistan was absent from an earlier schedule released in June, igniting speculation that the IMF was not going to release funds from the previous programme that expired on June 30. On June 29, the IMF and Pakistan reached a stand-by arrangement to ease the country’s financial crisis.

The board’s approvals are generally granted once a staff-level agreement is done. The Pakistan government was expecting about $2.5bn from the IMF, but it was given $3bn. Pakistan had earlier cleared eight of the 11 listed programme reviews, with the ninth review pending since November last year.

Pakistan’s external financing environment has improved since then as Fitch Ratings Inc. upgraded the cash-strapped country by one notch to CCC long-term foreign currency issuer rating this week.