The International Monetary Fund (IMF) has permitted Pakistan to borrow Rs1.25 trillion from local banks.

According to media reports, this decision came after recent policy negotiations between Pakistani officials and IMF representatives.

Islamabad has developed a six-year roadmap to reduce the burden of Rs2.4 trillion in circular debt in the power sector.

The government plans to use funds from bank loans and surcharges to repay Rs1.5 trillion in debt.

Moreover, the government expects to save Rs463 billion through recent negotiations with independent power producers.

Recently, IMF delegation visited Pakistan as they assured Finance Minister Muhammad Aurangzeb of their commitment to economic support for Pakistan.

On March 11, the government told IMF that seven state-owned entities, including Pakistan International Airlines, would be privatised, to complete the $7 billion loan programme.

Also, on March 7, the proposal to eliminate the goods and services tax (GST) on electricity bills for consumers has been rejected in the economic review negotiations between Pakistan and IMF, according to a report.

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