Islamabad, Jun 30 (IANS): After an eight-month delay, the Pakistan government and the International Monetary Fund (IMF) have finally reached a staff-level pact on a $3 billion stand-by arrangement as the cash-strapped nation is teetering on the brink of default, media reports said on Friday.

The deal however, is subject to approval by the IMF's Executive Board in July, reports Dawn news.

The $3 billion funding, spread over nine months, is higher than expected for Pakistan.

The country was awaiting the release of the remaining $2.5 billion from a $6.5 billion bailout package agreed in 2019, which expired on Friday.

To help secure the deal, the State Bank of Pakistan had raised its main interest rate to a record high of 22 per cent on Monday.

"The economy has faced several external shocks such as the catastrophic floods in 2022 that impacted the lives of millions of Pakistanis and an international commodity price spike in the wake of Russia's war in Ukraine," the BBC quoted Nathan Porter, IMF's mission chief for Pakistan, as saying in a statement issued on Friday.

"As a result of these shocks as well as some policy missteps... economic growth has stalled," he added.

On Thursday night,Finance Minister Ishaq Dar had said that a staff-level agreement for a crucial bailout deal with the IMF was “very close” and expected in the next 24 hours, Dawn news reported.

Dar had earlier told media that the government was working on a mechanism to try to unlock the full $2.5 billion pending under the IMF programme.

Amid the ongoing economic crisis, Pakistan's annual inflation rate hit a fresh record high in May of almost 38 per cent.

Over the last year the Pakistan rupee also fell by around 40 per cent against the US dollar.