In this photo released by the Press Information Department, visiting Afghan President Ashraf Ghani, left, reviews guard of honor with Prime Minister of Pakistan Imran Khan in Islamabad, Pakistan, Thursday, June 27, 2019. Ghani has arrived on his first visit to Pakistan, in an attempt to forge a fresh relationship with Prime Minister Imran Khan's government and reach out to Islamabad for help in getting the Taliban to talk peace with Kabul.(Press Information Department,via AP)

Pakistan gets approval from IMF for $6 billion loan

ISLAMABAD – The International Monetary Fund has approved a $6 billion bailout plan requested by the government of Pakistani Prime Minister Imran Khan to resuscitate the country’s ailing economy.

In a statement Wednesday, the IMF said the loan will help reduce public debt and expand social spending. But the IMF has attached some tough terms, including a commitment to let the market decide the Pakistani rupee rate, rather than be supported by the Central Bank. The rupee has plunged more than 40 per cent in the last year.

But with dangerously low foreign reserves, a tax base of barely 1% of its population, crushing trade deficits and a hefty defence budget, Khan has travelled the globe since his election last year seeking funds.

The first IMF disbursement will be $1 billion.

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