The SBP is also receiving an additional $200 million under the Resilience and Sustainability Fund
State Bank of Pakistan. Photo: File
The International Monetary Fund (IMF) has released a tranche of $1.2 billion to Pakistan, confirmed by the State Bank of Pakistan. According to State Bank of Pakistan officials, $1 billion of the amount was disbursed under the Extended Fund Facility (EFF) program, while the IMF released another $200 million under climate finance through the Resilience and Sustainability Facility (RSF).
The IMF’s executive board approved the release of the $1.2 billion tranche for Pakistan on Monday. The funds are provided under the EFF and RSF programs, bringing total disbursements under these programs to $3.3 billion.
The decision would keep the two loan programs worth $8.4 billion on track.
The IMF noted that Pakistan has made significant progress on reform measures under the EFF, maintaining economic stability despite a challenging global environment and recent devastating floods.
Financial performance remained strong with an underlying profit of 1.3% recorded for FY2025 in line with targets. While inflation rose, the IMF described it as temporary due to food supply disruptions.
Read: IMF approves $1.3 billion loan to Pakistan
Foreign exchange reserves have increased to $14.5 billion, showing a significant improvement over the previous year, with further increases expected in the coming financial year.
After the executive meeting, IMF Deputy Managing Director Nigel Clarke stated that Pakistan’s economic reforms have played a key role in maintaining macroeconomic stability under difficult conditions.
He highlighted positive signs including improved economic growth, lower inflation expectations and reduced fiscal and external deficits. However, he stressed that given the global uncertainty, Pakistan needs to accelerate reforms with prudent policies to ensure sustainable, private sector-led growth.
To secure the IMF board meeting date, the Pakistani authorities had agreed to fulfill two prior actions – a guarantee to issue an order to restructure an undercapitalized bank and the publication of the Governance and Corruption Diagnostic Assessment report – the latter costing the government political capital.
The $1.1 billion is the third tranche under the $7 billion economic stabilization package, approved based on Pakistan’s economic performance for the January-June period of the last fiscal year.
But to pave the way for the approval and continuation of the program, the board accepted Pakistan’s request for waivers for missing conditions for the end of June period and also relaxed at least three conditions for the next review.
