The executive board of the International Monetary Fund on Wednesday approved the agreement between Pakistan and the IMF for the $3 billion Stand-by Arrangement for nine months, the IMF said.

“Today, the Executive Board of the IMF approved a 9-month SBA for Pakistan for an amount of SDR2,250 million (about $3 billion, or 111% of quota) to support the authorities’ economic stabilisation program,” it said in a statement.

Pakistan signed a short-term IMF deal on June 30 under a Stand-by Arrangement, under which the country is set to receive $3 billion over nine months.

“The Executive Board’s approval allows for an immediate disbursement of SDR894 million (or about US$1.2 billion). The remaining amount will be phased over the programme’s duration, subject to two quarterly reviews,” the IMF added in its statement.

The IMF said that the arrangement comes at a challenging economic juncture for Pakistan.

“A difficult external environment, devastating floods, and policy missteps have led to large fiscal and external deficits, rising inflation, and eroded reserve buffers in FY23. Pakistan’s new SBA-supported program will provide a policy anchor for addressing domestic and external imbalances and a framework for financial support from multilateral and bilateral partners,” it added.

The latest development comes after Pakistan received $1 billion from the United Arab Emirates earlier.

Finance Minister Ishaq Dar announced the receipt of the inflows saying that Saudi Arabia has also deposited $2 billion in the State Bank of Pakistan a day earlier.

The government was optimist of a likely approval of the programme by the IMF’s executive board after it fulfilled almost all of the conditions of the global lending institution.