The International Monetary Fund's (IMF) executive board has given the green light for a USD 1.1 billion loan tranche for Pakistan, signalling the conclusion of the second bailout package, Pak based ARY News reported.

This latest funding marks the third and final instalment of a USD 3 billion standby arrangement with the IMF, crucial for Pakistan to stave off a sovereign default, particularly as the existing arrangement is set to expire this month.

Following discussions in Washington, the IMF Executive Board approved Pakistan's request for the release of funds. Insiders suggest that Pakistan can expect to receive the loan disbursement promptly, likely as soon as tomorrow (Tuesday), following the IMF's authorisation, as reported by ARY News.

Last month, Pakistan and the IMF reached a staff-level agreement on the final review of the USD 3 billion bailout package. The country has already received two tranches totaling USD 1.9 billion, with USD 1.2 billion disbursed in July and an additional USD 700 million in January 2024.

Looking ahead, Pakistan is eyeing a new, more substantial IMF loan over a longer duration. Finance Minister Muhammad Aurangzeb has indicated that Islamabad could secure a staff-level agreement on the new program as early as July.

The focus is on securing a loan spanning at least three years to bolster macroeconomic stability and implement much-needed structural reforms. However, the exact scale of the program remains undisclosed.

This development follows Pakistan Prime Minister Shehbaz Sharif's meeting with IMF Managing Director Kristalina Georgieva, where he reaffirmed his government's commitment to revitalizing Pakistan's economy.

During the meeting, held on the sidelines of the World Economic Forum Special Meeting, the Prime Minister emphasised his administration's dedication to implementing structural reforms, ensuring fiscal discipline, and pursuing prudent policies for sustained economic growth.

Expressing gratitude, the Prime Minister thanked Georgieva for the IMF's support in securing the USD 3 billion Standby Arrangement last year, ARY News reported.

(With Agency Inputs)