Pakistan locks $1.3bn IMF lifeline

December 09, 2025 (MLN): The IMF Executive Board has approved a loan package of about $1.3 billion, which gave the government fresh financial room at a time when the economy continues to stabilise but remains vulnerable.

The IMF cleared around $1.09 billion under the Extended Fund Facility (EFF) and another $200 million through the Resilience and Sustainability Facility (RSF), according to sources.

 The approval followed a staff-level agreement that Pakistan and the Fund reached in October after detailed talks in Karachi, Islamabad and later Washington under mission chief Iva Petrova.

Ahead of the meeting, the IMF published its  Governance and Corruption Diagnostic Assessment report.

The assessment warned that entrenched corruption, elite capture, and weak institutional oversight have consistently undermined Pakistan’s economic development, leading to revenue leakages, distortions in public spending, and erosion of trust in the legal system. 

The approval reflects confidence in Pakistan’s economic direction.

Despite internal pressures, the Finance Ministry remained committed to keeping the programme on track, while traditional partners, including Saudi Arabia, China, and the UAE, continued their support.

Saudi Arabia extended its $3 billion deposit for another year last week, which helped keep the State Bank’s reserves at $14.5 billion as of November 28.

Stocks React and Outlook for Today

The stock market had already priced in a positive outcome. On Monday, the KSE-100 Index closed at 168,303.24, up 1,217.66 points or 0.73%, after staying in the green for most of the session.

The benchmark touched an intraday high of 168,755.18, reflecting strong buying interest ahead of the Board’s meeting.

The IMF’s official approval of the disbursement is expected to trigger another active trading session at the bourse.

Foreign inflows and institutional buyers will likely show strong interest, and momentum should remain on the bulls' side.

Notably, Pakistan is emerging from one of its most severe macroeconomic crises in decades, and recent economic data have eased immediate concerns. Still, deeper structural reforms remain essential for the country to transition from short-term stabilisation to sustainable, long-term growth.

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