The Board of Directors of the International Monetary Fund (IMF) has approved a $3 billion (£2.3 billion) bailout package for Pakistan.

The country affected by the crisis will receive about $1.2 billion in upfront payments, the rest to be paid over the next 9 months.

The South Asian country is on the verge of default and barely has enough foreign currency to pay for imports for a month.

This week, it also received money from allies Saudi Arabia and the United Arab Emirates (UAE).

Pakistani Prime Minister Shehbaz Sharif said the bailout was an important step in efforts to stabilize the economy.

“It strengthens Pakistan’s economic position to weather the immediate to medium-term economic challenges, giving the next government the financial space to chart the way forward,” he said.

The IMF agreement comes after eight months of difficult negotiations on how to resolve the serious longstanding problems with Pakistan’s ailing economy.

The country was on the verge of not being able to repay its creditors.

Much of the country was devastated by floods last year, which adds to other major problems facing the country, including high inflation and economic mismanagement by successive governments.

Pakistani Finance Minister Ishaq Dar said Saudi Arabia had deposited $2 billion in Pakistan’s central bank on Tuesday.

On Wednesday, Mr. Dar said the central bank had also received $1 billion from the UAE.

Energy-rich Middle Eastern countries pledged funding in April, but delayed handing it over until it was certain that the IMF bailout would be completed.

The deal with the IMF, along with money from Saudi Arabia and the UAE, will open up more funds to help support Pakistan’s ailing economy.

Pakistan’s foreign exchange reserves are expected to grow to about $15 billion by the end of this month, Dar said.

On Monday, credit rating agency Fitch upgraded Pakistan’s sovereign rating, with the deal providing some relief for investors in the country’s stocks and bonds.

Mr Sharif’s coalition government, which faces a national election this year, still has to make major spending cuts to meet the conditions of the bailout.

The cost of living has skyrocketed in Pakistan. The official annual inflation rate is now near 30%.

Last month, the country’s central bank raised its main interest rate to a record high of 22% as the country struggled to contain soaring prices.

This week’s bailout is the latest support that Pakistan has received from the IMF. It has received more than 20 loans from international lenders since 1958.