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Pakistan gets $ 5.5b IMF bailout package

After two weeks of tough talks, the International Monetary Fund agreed today to give Pakistan $ 5.5 billion to salvage its shattered economy, finance officials said.

The agreement saves Pakistan from a certain default on its whopping $ 32 billion debt.

The agreement ends months of economic uncertainty during which time Pakistan's stock market plunged to record lows, foreign investment dried up and jittery Pakistani investors stayed out of the market.

The IMF deal still requires final approval from the IMF board of directors at a meeting in Washington next month.

The biggest hurdle to the bailout package was removed earlier this month when the United States agreed to support a one-time deal for Pakistan in spite of sanctions imposed on both Pakistan and India last May.

The sanctions were aimed at punishing the two neighbours for conducting underground nuclear tests. Pakistan was badly affected because it is so heavily dependent on international aid.

The bailout package for Pakistan also comes with a number of conditions which include structural reform in its banking sector, tax reform to increase its tax base and revenue as well as a provision to try to reduce corruption.

UNI

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