The International Monetary Fund (IMF) said on Friday that its board had completed reviews of some of its agreements with Pakistan, clearing the way for Islamabad to access about $1.32 billion in fresh funding immediately.
According to the IMF, Pakistan would be able to access the funds in two instalments, with about $1.1 billion under the Extended Fund Facility and about $220 million under the Resilience and Sustainability Facility. This means that Islamabad has now got a total of about $4.8 billion in disbursements under the two ongoing debt packages.
Pakistan is on a $7 billion IMF programme and reached a staff-level agreement in March.
"Amid a more challenging and highly uncertain external environment since the onset of the war in the Middle East, Pakistan needs to maintain strong macroeconomic policies while accelerating reform efforts," the IMF said in a statement. In April, Pakistan's central bank raised its key policy rate by 100 basis points to 11.5%, marking its first hike in almost three years.
"The State Bank of Pakistan has acted proactively to maintain an appropriately tight monetary policy stance," the IMF added.
{{/usCountry}}"The State Bank of Pakistan has acted proactively to maintain an appropriately tight monetary policy stance," the IMF added.
{{/usCountry}}The Express Tribune newspaper reported that the money would be disbursed early next week, bringing the central bank's reserves to over $17 billion.
However, the government had to stick to the old fiscal and monetary targets and committed to staying on the path of stabilisation despite strong voices opposing these policies, which have led to higher unemployment, poverty, and income inequality.
How did the IMF approval for Pakistan come about?
The IMF approval came after the Pakistan government showed better performance against fiscal and monetary targets, but there were divergent views about the path during the second half of the fiscal year.
The IMF mission reviewed Pakistan's economic performance for the July-December 2025 period, including the third review of the $7 billion bailout package.
Pakistan met all end-December 2025 quantitative performance criteria and outperformed the floor on net international reserves, comfortably meeting the general government's primary balance target.
The government also met six of eight end-of-December 2025 indicative targets, but the Federal Board of Revenue remained the weakest link. It missed targets for net tax revenues collected by the FBR and income tax revenues from retailers, both of which fell short of IMF targets.
However, the government assured the IMF that it would remain focused on implementing revenue administration reforms to minimise the shortfall by the end of the fiscal year.
To offset the impact of the revenue shortfall on the IMF target, the government has increased petroleum levy rates.
The government also made some progress on structural reforms and met four structural governance benchmarks on time: social support, gas-sector sustainability, and special technology zones.
As part of the conditions of the $1.2 billion climate facility, the government adopted a green taxonomy and issued guidelines on the management of climate-related financial risks and on the disclosure of climate-related risks and opportunities by listed companies.
Pakistan’s assurances to the IMF for the fresh debt access
Pakistan’s finance minister, Muhammad Aurangzeb, assured the IMF that the country remains committed to maintaining sound and prudent macroeconomic policies and to pursuing structural and institutional reforms to place Pakistan on a path toward long-term, sustainable, and inclusive growth.
The fresh assurances have also been given to provide a foundation that can withstand shocks, including the impact of the US-Iran war.
Pakistan has now assured the IMF that it would not abandon the fiscal path agreed before the start of the conflict in West Asia and would deliver the ₹3.4 trillion primary budget surplus target.
According to another commitment, the new budget would be prepared in consultation with the IMF to ensure it is a fiscally tight budget and that the government does not pursue higher economic growth, the report said.