Pakistan, IMF in talks for $2.5 billion standby aid: Report

Pakistan is in talks with the International Monetary Fund for a new $2.5 billion quick standby assistance as the existing program expires on June 30, the Dawn newspaper reported Wednesday, citing people it didn’t identify.

Read here: IMF says Pakistan must complete 'few remaining points' to get $6.5 bn loan

The short-term arrangement — six to nine months — being proposed includes an upfront disbursement of $1.1 billion within the next 15 days, followed by two or three more reviews for as much as $500 million each, according to the newspaper. The plan will aid the the country’s transition to a newly elected administration later this year, it said.

The cash-strapped nation is taking decisive steps in line with the fund’s prescriptions to regain access to a $6.7 billion bailout program that’s been delayed for more than six months. Islamabad has tweaked the nation’s budget, hiked taxes and energy prices to win the lenders support.

The measure is one of the two options being discussed between Pakistan authorities and the Washington-based lender. The second option is for an immediate disbursement of $1.1 billion under the existing program, which would essentially forgo the balance $1.4 billion worth of quota approved by the IMF executive board, the newspaper said.

Read here: Pakistan inflation skyrockets to 47%, wheat and eggs are more expensive: Report

The South Asian nation is going through a severe economic crisis amid record inflation and interest rates. Funds will help the country overcome a dollar crunch, ease supply shortages, and lift the economy out of a crisis ahead of elections this year. Pakistan is one of the biggest customers of the IMF with almost two dozen bailouts since the 1950s.

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