IMF disburses second tranche of $1bn to Pakistan

May 14, 2025 (MLN):  Following the successful completion of Pakistan’s review under the IMF programThe State Bank of Pakistan (SBP) has received the second tranche of SDR 760 million (approximately US$1.023 billion) from the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) program.

According to the central bank, the inflow will be reflected in SBP’s foreign exchange reserves for the week ending May 16, 2025.

This disbursement is expected to strengthen the country's foreign exchange buffer and support the balance of payments.

Last week, the Board of IMF approved a total of $2.3bn in funding for Pakistan, comprising the disbursement of a $1bn tranche under its ongoing Extended Fund Facility (EFF) and the launch of a new $1.4bn Resilience and Sustainability Facility (RSF).

The latest develoment brings total disbursements under the $3bn EFF program to $2.1bn.

The $1bn tranche has been disbursed immediately, while the RSF financing will be rolled out over the next 28 months to support long-term sustainability and climate resilience efforts.

Pakistan’s economic team, under the leadership of Finance Minister Muhammad Aurangzeb played key roles in steering the talks after earlier hurdles threatened to delay progress.

The IMF board gave the green light despite a reported attempt by India to oppose the disbursement, given India holds just 2.7% of the IMF's voting power.

Prime Minister Shehbaz Sharif welcomed the decision, calling it a "vote of confidence" in Pakistan’s reform agenda. "The government remains focused on structural reforms, including tax mobilization, energy sector overhaul, and boosting private sector participation," his office said in a statement.

The development also indicated renewed confidence in the government’s ability to adhere to fiscal discipline and push forward with reform commitments.

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