Finance Minister Miftah Ismail announced on Monday that the International Monetary Fund (IMF) has approved revival of the Extended Fund Facility (EFF) for Pakistan, paving the way for an inflow of $1.17 billion.

"We should now be getting the 7th & 8th tranche of $1.17 billion. I want to thank Prime Minister Shehbaz Sharif for taking so many tough decisions and saving Pakistan from default. I congratulate the nation," he said on Twitter.

An announcement by the IMF, however, has yet to be issued, but is expected shortly.

IMF says Executive Board meeting set for August 29

Background

In July, IMF had reached the staff-level agreement (SLA) with Pakistan authorities for conclusion of the combined seventh and eighth reviews of the EFF, with the agreement subject to approval of the Executive Board.

On August 2, IMF said that the Pakistan met all prior actions agreed with the Fund. The statement came after the government increased the petroleum development levy (PDL) on petrol to Rs20 per litre and on high speed diesel to Rs10.

The IMF funding, along with other financing, is crucial for Pakistan that is desperately seeking dollar inflows in the face of falling foreign exchange reserves. The decline in reserves has also hurt the currency, which saw its worst month in over 50 years in July.

On Monday, the rupee recorded a loss for the sixth successive session against the US dollar and depreciated 0.57% in the inter-bank market.

The Board approval comes as Pakistan secured financing that the IMF required it to first arrange before considering a bailout deal worked out between the lender's staff and the country.

These assurances have come from Saudi Arabia, Qatar Investment Authority, and the UAE who have announced investing in different sectors of Pakistan's economy.