March 27 : The International Monetary Fund and Pakistan has reached a staff-level agreement on the South Asian nation’s loan program, a key step toward unlocking $1.2 billion in funding, the fund said on Friday.

The agreement, which requires IMF board approval, would give Pakistan access to $1 billion under the Extended Fund Facility and $210 million under the Resilience and Sustainability Facility, bringing disbursements under the ongoing program to $4.5 billion.

Under the $7 billion program, the Washington-based lender is urging Islamabad’s policymakers to keep monetary policy tight and data-dependent to anchor inflation expectations and strengthen external buffers.

Pakistan’s central bank kept its key policy rate unchanged at 10.5 per cent this month, pausing its rate cuts as rising global energy prices and regional tensions pose new inflation risks for the import-dependent economy.