IMF approves Pakistan loan package

ISLAMABAD: Pakistan has won final approval for a $7.6 billion loan from the International Monetary Fund to help the front line state in the campaign against Islamist terrorism stave off possible economic meltdown.

The IMF says a first installment of US$3.1 billion will be transferred immediately to the nuclear-armed country, which is battling surging al-Qaida violence and is increasingly seen in the West as key to stabilizing neighboring Afghanistan.

The IMF says the Pakistani economy had been badly hit the by the worsening security situation, higher oil and food import prices and the global financial and credit crisis.

IMF acting Chairman Takatoshi Kato says in a statement released Monday in Washington that the fund is sending a strong signal to the donor community about Pakistan's ``improved macroeconomic prospects.''

Pakistan's young government had been reluctant to go to the IMF but had little choice after close allies - the United States, China and Saudi Arabia - turned down pleas for significant bilateral aid.