Islamabad: The board of the International Monetary Fund (IMF) has approved a $3 billion bailout package for Pakistan, Reuters reported.

As part of this program, approximately $1.2 billion will be disbursed immediately to provide assistance to the cash-strapped South Asian country, IMF said.

Pakistan had previously reached a staff-level agreement with the IMF last month, which paved the way for securing crucial funding for the nation, which has been facing financial challenges.

The board's approval was a necessary step to enable the disbursement of the first installment of funds, with the remaining amount scheduled to be provided in subsequent installments.

"The Executive Board of the International Monetary Fund (IMF) approved a 9-month Stand-By Arrangement (SBA) for Pakistan for an amount of SDR2,250 million (about $3 billion, or 111 percent of quota) to support the authorities' economic stabilization program," the IMF said in a statement.

The approved arrangement with the International Monetary Fund (IMF) comes at a challenging economic juncture for Pakistan.

The country has been facing a difficult external environment, including factors such as devastating floods, policy missteps, and various economic challenges.

These challenges have pushed the country’s economy into massive fiscal and external deficits, a rise in inflation, and a depletion of reserve buffers during the fiscal year 2023.

The IMF program aims to address these issues and provide support to stabilize Pakistan's economy.