Mongolia has reached an agreement with the International Monetary Fund on a $5.5 billion bailout package, officials announced, as the debt-wracked country tries to stabilise its economy. 

The landlocked north Asian nation has been hit hard by a more than 50 percent fall over the past five years in the price of copper, its main export.

Billions of dollars' worth of natural resources lie buried beneath Mongolia's sprawling steppes, but development has been delayed for years and slowing growth in its biggest customer China has hobbled the economy.  

Mongolia's economy grew 1.0 percent in 2016, while its budget deficit exploded to 3.7 trillion tugrik ($1.5 billion) according to its national statistics office. 

The rescue package will include a $440 million loan over the next three years, Koshy Mathai, the IMF's Asia-Pacific deputy division chief, said in a statement issued Sunday. 

The Asian Development Bank, World Bank, Japan and Korea are expected to provide another $3 billion in support, while the People's Bank of China will extend its 15 billion yuan ($2.2 billion) swap line for another three years.

The bailout package is intended to "restore economic stability and debt sustainability as well as to create the conditions for strong, sustainable, and inclusive growth, while protecting the most vulnerable citizens", Mathai said. 

It will help the cash-strapped country make a $580 million bond payment due in March. 

The loan is subject to approval by the IMF's executive board, which is expected to consider it in March.  

"Fiscal consolidation is a key priority, as loose fiscal policy in the past was a major driver of Mongolia’s current economic difficulties and high debt," Mathai added.