IMF loan to Pakistan reaches $11.3 billion

After the International Monetary Fund agreed to increase lending to Pakistan on Friday by an extra $3.2 billion to fund priority spending and help the government provide assistance to nearly three million people displaced by military operations in Swat and Malakand (See: IMF approves $3.2 billion loan to Pakistan), the total lending to the country now stands at total loan to $11.3 billion.

The increased $3.2-billion lending comes after the Washington-based lender agreed to a $7.6 billion loan in November 2008, (See: IMF bails out Pakistan with $7.6 billion loan) total loan to $11.3 billion bringing.

The IMF said in a statement, ''During the August 7 discussion, Directors agreed to increase lending by $3.2 billion, after a request from the Pakistan government to meet the country's increased balance of payments needs resulting from higher oil prices. Pakistan will also benefit from the proposed allocation of Special Drawing Rights, which will supplement its reserves.''

About $1.4 billion of the new IMF resources will be made available on a temporary basis, for budget financing during 2009-10. The IMF said that the main purpose is to provide bridge financing until the $5.7 billion pledged by 'Friends of Democratic Pakistan' over three years at an April donors conference in Tokyo starts to come in.

The IMF executive board also approved extending the entire standby arrangement to Pakistan by about two months until the end of 2010.

Out of the $7.6 billion stand-by arrangement agreed in November, the IMF has already disbursed $4 billion.