Pakistan to get $7.6B IMF loan

ISLAMABAD, Pakistan (CNN) -- The International Monetary Fund has approved a $7.6 billion loan to Pakistan to help the South Asian country of 170 million people avoid an economic collapse.

The first installment of the loan -- $3.1 billion -- will be transferred immediately, the IMF said. The rest will be paid out over a 23-month period based on quarterly reviews.

The IMF endorsed the loan after a review of Pakistan's plans for economic reforms, Shaukat Tareen, finance adviser to the prime minister, told CNN earlier this month. The loan will help Pakistan meet short-term financial needs, Tareen said.

"The only thing which we debated was the interest rates," Tareen said. Pakistan agreed to a 2 percent interest rate, he added.

The global financial crisis has badly hit Pakistan's economy, as it has several other countries. A worsening security situation, and rising food and oil prices, have also contributed to the crisis in Pakistan.

In recent weeks, the IMF has moved to help several countries recover from the financial market turbulence.

The fund on Wednesday pumped about $827 million into Iceland's economy, with another $1.3 billion coming later in eight installments. Both moves are aimed at stabilizing Iceland's finances and shoring up its currency, which plummeted after a series of bank failures in October.

In October, the IMF agreed to lend Hungary $15.7 billion. It also promised Ukraine $16.5 billion if it took steps to rein in its budget.

The IMF says it has more than $200 billion in lendable resources. Japan has offered additional funds if needed.

All About International Monetary Fund