Pakistan just received $1.02B IMF Tranche to boost reserves

ISLAMABAD: The State Bank of Pakistan (SBP) has confirmed the receipt of SDR 760 million (approximately $1.023 billion) from the International Monetary Fund (IMF).

This second tranche under the Extended Fund Facility (EFF) comes days after the IMF Executive Board completed Pakistan’s first program review.

According to the SBP, the newly received funds will be reflected in the foreign exchange reserves for the week ending May 16, 2025. Economists suggest that the inflow will not only provide breathing room to the rupee but also offer short-term relief to Pakistan’s balance of payments position.

The disbursement is part of a $7 billion EFF agreement that aims to support macroeconomic stabilization and help the country manage external financing needs. With this release, total funds disbursed under the EFF now stand at $2.1 billion.

IMF Endorses Pakistan’s Progress

The IMF Executive Board convened in Washington, D.C. on May 9, endorsing Pakistan’s progress on economic reforms. This approval followed a staff-level agreement signed on March 25, 2025, between IMF representatives and Pakistani authorities.

Despite India’s reported opposition, based on concerns that the funds might be diverted to support cross-border hostility, the disbursement went ahead. India, holding 2.7% of IMF voting power, was unable to block the decision.

The IMF approved a separate $1.4 billion under the Resilience and Sustainability Facility (RSF). This is in addition to the EFF tranche. Moreover, the RSF funds will be disbursed over the next 28 months.