By Asif Shahzad

ISLAMABAD, (Reuters) – The International Monetary Fund (IMF), announced Monday that it had reached an agreement to help Pakistan revive a $6 billion financing program for South Asia. Pakistan is facing increasing economic difficulties.

The IMF released a statement saying that the Pakistani authorities had reached an agreement at staff level on the policies and reforms required to finish the sixth review.

The agreement must be approved by the Executive Board following implementation of any prior actions, including fiscal and institution reforms.

According to it, the completion of the review will make possible 750 million IMF special draw rights (or approximately $1.059billion), bringing total disbursements up to $3.027billion.

In 2019, Pakistan joined the IMF’s $6 billion financing programme. However, reforms caused the funding to be halted earlier in the year.

Shaukat Tarni, Pakistan’s Finance Adviser, said that last week Pakistan was in discussions with IMF about terms and conditions of its programme. This was due to the economic losses from COVID-19 closures.

According to him, Pakistan must complete five reforms in order for the IMF to revive its funding. These include legislation regarding central bank autonomy and the withdrawal of tax exonerations.

According to a spokesperson for Pakistan’s Finance Ministry, the agreement was reached after 45 days worth of talks between the IMF finance team and Pakistan.

He said, “This will eliminate many uncertainties.”

Pakistan’s history has seen high inflation, a currency devaluation, and an increase in current account deficit. Meanwhile investors are anxious to see the outcomes of talks between the government (and the IMF).