IMF approves $1.1 bln funding for Pakistan, says xxx

Pakistan's Finance Minister, Muhammad Aurangzeb, has said Islamabad could secure a staff-level agreement on the new program by early July. Islamabad says it is seeking a loan over at least three years to help achieve macroeconomic stability and execute long-overdue and painful structural reforms.

The executive board of the International Monetary Fund approved $1.1 billion in funding for Pakistan on Monday, the agency said in a statement, amid discussions for a new loan. The funding is the second and last tranche of a $3 billion standby arrangement with the IMF, which Islamabad secured last summer to help avert a sovereign default.

The approval came a day after Pakistan Prime Minister Shehbaz Sharif discussed a new loan programme with IMF Managing Director Kristalina Georgieva on the sidelines of the World Economic Forum in Riyadh. Islamabad is seeking a new, larger long-term Extended Fund Facility (EFF) agreement with the fund after the current standby arrangement expires this month. Pakistan's Finance Minister, Muhammad Aurangzeb, has said Islamabad could secure a staff-level agreement on the new program by early July.

Islamabad says it is seeking a loan over at least three years to help achieve macroeconomic stability and execute long-overdue and painful structural reforms. Aurangzeb has declined to give details on the amount the country is seeking.

Islamabad is yet to make a formal request, but the Fund and the government are already in discussions. If secured, it would be Pakistan's 24th IMF bailout.

The $350 billion economy faces a chronic balance of payments crisis, with nearly $24 billion to repay in debt and interest over the next fiscal year - three-time more than its central bank's foreign currency reserves. (Writing by Asif Shahzad; Editing by Raju Gopalakrishnan)

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