The International Monetary Fund (IMF) Executive Board has approved the 37-month, $7-billion Extended Fund Facility for Pakistan, according to a statement by the Prime Minister’s Office (PMO) on Wednesday.

The PMO announced the development while the IMF has yet to make an official statement.

According to the PMO, the IMF will immediately release an initial tranche of $1.1 billion, boosting the country’s foreign exchange reserves.

The Pakistani authorities and the IMF team reached staff-level agreement on the EFF in the amount equivalent to SDR 5,320 million (or about USD 7 billion) on July 12.

This agreement had been subject to approval by the IMF’s Executive Board and the timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.

Earlier this month, State Bank of Pakistan Governor Jameel Ahmad said the government had arranged external financing assurances, and it was hoped the IMF Executive Board will take up Pakistan’s loan programme during September.

“The government has arranged external financing,” Ahmad said at an analyst briefing held after the monetary policy announcement. “We are hopeful the IMF will take up Pakistan’s case in September.”

The same day, IMF spokesperson Julie Kozack also confirmed the development during a scheduled press briefing.

“The board meeting is scheduled to take place on September 25 and this is following Pakistan obtaining necessary financing assurances from its development partners,” Kozack said.

Analysts believe the IMF programme is crucial as it gives the government a roadmap for economic reforms while providing a cushion to the country’s foreign exchange reserves.