Pakistan receives $1 billion from IMF following successful first loan review

Pakistan has received $1 billion from the International Monetary Fund (IMF) which would help boost its foreign exchange reserves.

The State Bank of Pakistan confirmed that the central bank has received $1 billion from the IMF as the first installment from the Extended Fund Facility worth $7 billion approved last year. The government has so far received $2 billion from the donor agency.

On May 9, the International Monetary Fund's Executive Board approved the installment alongside funding under the Resilience and Sustainability Facility (RSF) worth $1.4 billion.

IMF last week said Pakistan’s policy efforts under the EFF have already delivered significant progress in stabilizing the economy and rebuilding confidence, amidst a challenging global environment.

Fiscal performance has been strong, with a primary surplus of 2.0% of GDP achieved in the first half of FY25, keeping Pakistan on track to meet the end-FY25 target of 2.1% of GDP.

Inflation fell to a historic low of 0.3% in April, and progress on disinflation and steadier domestic and external conditions, have allowed the State Bank of Pakistan to cut the policy rate by a total of 1100 bps since June 2024. Gross reserves stood at $10.3 billion at end-April, up from $9.4 billion in August, and are projected to reach $13.9 billion by end-June and continue to be rebuilt over the medium term.

The RSF will support the authorities’ efforts to reduce vulnerabilities to natural disasters and to build economic and climate resilience, it added.