Pakistan receives $1bn IMF tranche under Extended Fund Facility

The State Bank of Pakistan (SBP) on Wednesday confirmed that it has received the second tranche of $1.023 billion from the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) days after the global lender approved the first review of Pakistan’s ongoing loan programme.

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

The disbursement follows the IMF Executive Board’s meeting held in Washington, D.C., on May 9, during which it gave the green light to Pakistan’s progress under the $7 billion EFF arrangement.

The board’s approval comes after a staff-level agreement was reached between the Fund and Pakistani authorities on March 25, 2025.

The IMF also approved a new 28-month Resilience and Sustainability Facility (RSF) for Pakistan, granting access to an additional $1.3bn. The RSF aims to support Pakistan’s efforts to build climate resilience, a growing concern for the country in the wake of increasingly frequent extreme weather events.

In a statement following the board meeting, the IMF acknowledged Pakistan’s efforts in restoring macroeconomic stability, highlighting a sharp reduction in inflation — now at its lowest level since 2015 — alongside improved financial conditions and a strengthened external account.

However, the Fund also underscored persistent structural weaknesses in the economy, including a narrow tax base, weak governance frameworks, and underinvestment in key social sectors such as health, education, and infrastructure.