The International Monetary Fund (IMF) approved on Thursday $1.386 billion funding for Pakistan to meet the urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic.

“The Executive Board of the IMF approved a purchase of Pakistan under the RFI equivalent to SDR 1,015.5 million ($1.386 billion, 50 per cent of quota) to meet the urgent balance of payments needs stemming from the outbreak of the Covid-19 pandemic,” the IMF said in a statement.

While uncertainty remains high, the near-term economic impact of COVID-19 is expected to be significant, giving rise to large fiscal and external financing needs. The IMF support will help to provide a backstop against the decline in international reserves and provide financing to the budget for targeted and temporary spending increases aimed at containing the pandemic and mitigating its economic impact.

The IMF remains closely engaged with the Pakistani authorities and as the impact of the COVID-19 shock subsides will resume discussions as part of the current EFF.