ISLAMABAD: Pakistan has received the second tranche of approximately $1.023 billion from the International Monetary Fund (IMF) under the Extended Fund Facility (EFF), the State Bank of Pakistan (SBP) confirmed on Wednesday. The inflow, in the form of Special Drawing Rights (SDRs), will be reflected in the country’s foreign exchange reserves for the week ending May 16.
This follows the IMF Executive Board’s decision last week to approve the immediate disbursement of funds, bringing total disbursements under the EFF arrangement to about $2.1 billion (SDR 1.52 billion). In addition, the Board greenlighted Pakistan’s request for a $1.4 billion (SDR 1 billion) arrangement under the Resilience and Sustainability Facility (RSF), aimed at enhancing climate resilience and disaster preparedness.
In a statement issued last Friday, the IMF acknowledged Pakistan’s progress under the EFF, noting that policy reforms had yielded “significant progress” in stabilizing the economy and restoring investor confidence despite ongoing global challenges.
“Fiscal performance has been strong, with a primary surplus of two percent of GDP recorded in the first half of FY2024–25,” the statement noted, affirming that the country remains on course to meet the full-year target of 2.1 percent.
Inflation showed a dramatic decline, hitting a historic low of 0.3% in April. The improved economic outlook, along with more stable domestic and external conditions, enabled the SBP to reduce the policy rate by 1100 basis points since June 2025. Gross official reserves rose to $10.3 billion by the end of April, up from $9.4 billion in August 2024, and are projected to reach $13.9 billion by the end of June.
The IMF emphasized that the newly approved RSF will support Pakistan’s strategic initiatives aimed at mitigating climate risks and strengthening long-term economic sustainability.
Reacting to the IMF’s decision, the Prime Minister’s Office issued a statement highlighting the government’s satisfaction with the outcome. Prime Minister Shehbaz Sharif expressed optimism about the country’s economic direction and took aim at India’s alleged attempts to undermine Pakistan’s progress.
“The approval reflects the international community’s confidence in Pakistan’s economic reforms,” said the prime minister. “India’s high-handed tactics and propaganda have failed. Our economic indicators are improving, and Pakistan is moving steadily toward development.”
