The International Monetary Fund agreed on Friday to increase lending to Pakistan by an extra $ 3.2 billion to fund priority spending and help the government provide assistance to nearly three million people displaced following security operations in northwestern areas, The Associated Press of Pakistan reported. The IMF Executive Board reviewed progress under last year's $ 7.6 billion Stand-By Arrangement for Pakistan and noted with appreciation the steps Islamabad is taking to stabilize the economy in the face of difficult security challenges and global economic conditions. The Board also approved the extension to end 2010 of the arrangement, originally approved on November 24, 2008. The review also paved the way for the immediate disbursement of an additional $ 1.2 billion to the country. In the meeting, the directors agreed to increase lending by $ 3.2 billion, after a request from the Pakistan government to meet the country's increased balance of payments needs resulting from higher oil prices. Pakistan will also benefit from the proposed allocation of Special Drawing Rights, which will supplement its reserves.