SBP also receives an additional $200 million under the Resilience and Sustainable Development 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 this amount was disbursed under the Extended Financing Facility (EFF) program, while the IMF released another $200 million under climate finance through the Resilience and Sustainability Facility (RSF).
The IMF Executive Board on Monday approved the release of the $1.2 billion tranche for Pakistan. The funds are being provided under the EFF and RSF programs, bringing the total disbursements under these programs to $3.3 billion.
Under the ruling, the two loan programs worth $8.4 billion would remain on track.
The IMF noted that Pakistan has made significant progress on reforms under the EFF, maintaining economic stability despite a challenging global environment and recent devastating floods.
Financial performance remained strong, with a primary surplus of 1.3% recorded for FY2025, in line with targets. Although inflation has increased, the IMF has called it temporary, due to disruptions in food supplies.
Read: IMF approves $1.3 billion loan for Pakistan
Foreign exchange reserves reached $14.5 billion, a significant improvement from the previous year, and further increases are expected in the next financial year.
After the Board meeting, IMF Deputy Managing Director Nigel Clarke said Pakistan’s economic reforms have played a key role in maintaining macroeconomic stability under difficult conditions.
He pointed to positive signs, including better economic growth, lower inflation expectations and a reduction in fiscal and external deficits. However, he stressed that given global uncertainties, Pakistan needs to accelerate its reforms with prudent policies to ensure sustainable private sector-led growth.
To secure the date of the IMF board meeting, Pakistani authorities had agreed to fulfill two prior actions – a guarantee to issue an order to restructure an undercapitalized bank and the release of the governance and corruption diagnostic assessment report – the latter costing the government political capital.
The $1.1 billion amount is the third tranche of the $7 billion economic stabilization plan, approved on the basis of Pakistan’s economic performance for the January-June period of the last fiscal year.
But to pave the way for approval and continuation of the program, the board accepted Pakistan’s waiver request for non-compliance with certain conditions for the end-June period and also relaxed at least three conditions for the next review.
