The funds are the final tranche of a US$3 billion last-gasp rescue package Pakistan had secured last summer, which averted a sovereign debt default. Islamabad is also seeking another long-term bailout.

“The IMF team has reached a staff-level agreement with the Pakistani authorities on the second and final review of Pakistan’s stabilization program,” the IMF said in a statement.

“This agreement is subject to approval by the IMF’s Executive Board,” it added. The agreement expires on April 11.

The deal comes after the IMF mission held five days of talks with Pakistani officials to review the fiscal consolidation benchmarks set for the loan.

Most Pakistan dollar bonds were trading higher today after the deal was announced.

The 2027-maturing bond US740840AC76=TE was up US$0.25 cents at US$83.957 cents on the dollar while the 2025 bond US695847AR45=TE was up US$0.21 cents at US$92.023 cents on the dollar.

Pakistan’s finance minister Muhammad Aurangzeb said that Islamabad will seek another long-term bailout. The IMF said Pakistan had expressed interest in a deal and that it would formulate a medium-term programme if Islamabad applied for one.

The government has not officially stated the size of the additional funding it is seeking through a successor programme, however, Bloomberg reported in February that Pakistan planned to seek a new loan of at least US$6 billion from the lender.

The debt-ridden economy, which shrank 0.2% last year and is expected to grow around 2% this year, has been under extreme stress with low reserves, a balance of payment crisis, inflation at 23%, policy interest rates at 22%, and record depreciation of the local currency.

Ahead of the stand-by arrangement, Pakistan had to meet IMF conditions including revising its budget, and raising interest rates, generating revenues through more taxes, and raising the price of electricity and gas, which fuelled inflation.