The State Bank of Pakistan confirmed on Wednesday the receipt of a $1.023 billion tranche from the International Monetary Fund (IMF) under the Extended Fund Facility (EFF), marking a significant boost to the country’s foreign reserves ahead of critical budget planning.
The disbursement follows the IMF Executive Board’s approval of the first review of Pakistan’s $7 billion loan programme during its meeting in Washington on May 9. This inflow will be reflected in the nation’s reserves for the week ending May 16, the central bank said.
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In addition to the EFF tranche, the IMF also greenlit a $1.3 billion Resilience and Sustainability Facility (RSF) aimed at helping Pakistan tackle climate-related challenges. The Fund acknowledged the country’s progress in stabilising its economy, including lower inflation and improved financial conditions, but noted ongoing structural vulnerabilities.
Meanwhile, Pakistan and the IMF have begun virtual discussions on the 2025-26 federal budget. These talks, running from May 14 to 16, will transition to in-person sessions in Islamabad until May 23. The discussions will focus on tax reforms, fiscal targets, and structural adjustments to support sustainable growth.
Finance Minister Muhammad Aurangzeb has indicated that the finalisation of the budget is expected within three to four weeks, with a central focus on strengthening fiscal credibility and reform momentum.
