WASHINGTON: The International Monetary Fund’s (IMF) Executive Board has greenlighted a 37-month $7 billion Extended Fund Facility (EFF) for Pakistan, with the incumbent government hoping that it would be the country’s last.

Sources told Geo News that the interest rate on the loan is less than 5%, adding that the IMF was expected to disburse the first tranche of $1.1 billion by September 30, 2024.

Confirming the development, State Bank of Pakistan (SBP) Governor Jameel Ahmed said that Islamabad would receive first tranche of $1.10 billion, adding, the country has fulfilled all demands of the global lender.

In July this year, Pakistan and the IMF reached an agreement on the 37-month loan programme.

The approval finally came following the confirmation of $12 billion in bilateral loans from Saudi Arabia, China and the UAE and the external financing of $2 billion.

According to insiders, Pakistan owes $5 billion to Saudi Arabia in the form of cash deposits. It must be noted that Pakistan also holds $4 billion in deposits from China and $3 billion from the UAE.

Pakistan was required to secure external financing of $2 billion from bilateral and commercial lenders as a pre-requisite for the IMF board’s approval.

Later, the global lender identified an external financing gap of $2 to $2.5 billion and confirmation was secured from the kingdom in the shape of a Saudi oil facility as well as an ITFC facility of $400 million from IsDB and remaining from Standard Chartered Bank and other Middle East-based commercial banks, as per The News report.

Islamabad has relied heavily on IMF programmes for years, at times nearing the brink of sovereign default and having to turn to countries such as the United Arab Emirates and Saudi Arabia to provide it with financing to meet external financing targets set by the IMF.

This is a developing story and is being updated with more details.