Crisis-hit Pakistan strikes $3bn funding deal with IMF

Crisis-hit Pakistan has reached an agreement with the International Monetary Fund (IMF) over $3bn (£2.4bn) of funding.

The deal, which still needs to be approved by the global lender's board, comes after an eight-month delay.

The South Asian nation is facing its worst economic crisis since independence from Britain in 1947.

To help secure the deal, Pakistan's central bank raised its main interest rate to a record high of 22% on Monday.

Pakistan's economy, which was already struggling after years of financial mismanagement, has been pushed to the brink by a global energy crisis and devastating floods that hit the country last year.

"The economy has faced several external shocks such as the catastrophic floods in 2022 that impacted the lives of millions of Pakistanis and an international commodity price spike in the wake of Russia's war in Ukraine," Nathan Porter, IMF's mission chief for Pakistan said.

"As a result of these shocks as well as some policy missteps... economic growth has stalled," he added.

Pakistan's annual inflation rate hit a fresh record high in May of almost 38%.

The $3bn of funding, which will be spread over nine months, is higher than expected.

The country was awaiting the release of the remaining $2.5bn from a $6.5bn bailout package agreed in 2019, which expired on Friday.