Pakistan gets final approval for a $7.6billion loan from IMF

Pakistan won final approval for an emergency $7.6 billion International Monetary Fund loan on Monday to avert a balance-of-payments crisis in the strategically vital country.

Pakistan will immediately access $3.1 billion under the 23-month facility with the rest phased in subject to quarterly review, the fund said.

The programme has twin goals: to steady the economy and restore confidence by tightening macroeconomic policy, and to ensure social stability and support for the poor and vulnerable, the fund said.

WHY DOES PAKISTAN NEED AN IMF PACKAGE

- Foreign exchange reserves fell $100 million to $6.64 billion in the week that ended on Nov. 15, or just enough to cover nine weeks of imports. The central bank's own reserves fell to $3.46 billion from $3.50 billion a week earlier.

- Imports for October totalled $3.46 billion, while exports were worth $1.52 billion.

- The current account deficit almost doubled in the first four months of the 2008/09 fiscal year that began on July 1 from the same period a year earlier. The deficit stood at $5.9 million in the four months to the end of October, compared with $3 billion in the same period last year.

- Pakistan has a $500 million bond due to mature in February. The market had priced in the risk of a default but the IMF loan removes that risk.