ISLAMABAD (Reuters) - 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.
(This story has been refiled to remove extraneous words in the headline)
(Writing by Asif Shahzad; Editing by Raju Gopalakrishnan)
