The International Monetary Fund (IMF) review mission has started discussions with the State Bank of Pakistan (SBP) as part of the fourth review of Pakistan’s $7 billion Extended Fund Facility (EFF) programme. The initial round of negotiations is taking place in Karachi, with discussions focused on key monetary and financial issues including inflation, monetary policy and the exchange rate. The mission is expected to remain in Karachi during the current week before moving to Islamabad for broader discussions with the federal government.
According to the schedule, the IMF mission is expected to arrive in Islamabad on September 28 to begin talks with the Ministry of Finance, Federal Board of Revenue (FBR) and other relevant ministries. The Islamabad phase of the negotiations is expected to proceed provided that the situation in the federal capital remains normal. The discussions will form part of a wider review process covering Pakistan’s economic performance and implementation of commitments agreed under the IMF-supported programmes.
The negotiations will cover three major areas: the fourth review of the EFF, the third review under the Resilience and Sustainability Facility (RSF), and the IMF’s Article IV consultation. The overall review process is expected to continue for around two weeks and will assess Pakistan’s economic developments and programme performance through June 2026. The discussions will examine whether the government has met agreed targets and commitments and will consider developments across fiscal, monetary and structural areas of the economy.
A significant part of the talks is expected to focus on the government’s progress against programme targets, including structural benchmarks and tax reforms. The IMF and Pakistani authorities will also discuss measures concerning the power and gas sectors, along with other fiscal and structural issues. Monetary conditions, inflation and exchange rate developments will remain part of the discussions with the central bank, while the wider negotiations in Islamabad will cover government policies and implementation of reforms under the programme.
The Article IV consultation will take place alongside the EFF and RSF reviews. As part of this process, the IMF will conduct a broader assessment of Pakistan’s economic conditions, policies and overall macroeconomic situation. The findings from the consultation are expected to be presented to the IMF Executive Board after the process is completed. The results are also expected to be made public alongside the IMF’s review report following completion of the fourth EFF review.
Pakistan and the IMF staff will also seek to reach a staff-level agreement covering both the fourth EFF review and the third RSF review during the upcoming negotiations. Reaching such an agreement would mark an important procedural step, but it would not by itself release additional funds. Any staff-level agreement would subsequently have to be considered and approved by the IMF Executive Board before the related financing could become available to Pakistan.
If the reviews are completed successfully and the agreement receives Executive Board approval, Pakistan would gain access to around $1 billion under the EFF and another $200 million through the RSF. Pakistan has already received around $4.8 billion under the two arrangements. The upcoming discussions will therefore assess both the progress already made under the programmes and the remaining commitments required for continued financial support.
The review comes as Pakistan continues to implement fiscal, monetary and structural measures linked to its IMF arrangements. The discussions with the SBP in Karachi will provide an initial assessment of monetary and financial developments, while the subsequent meetings in Islamabad will bring the Ministry of Finance, FBR and other government institutions into the review process. The outcome of the negotiations will determine whether the authorities and IMF staff can reach the required staff-level agreement before the matter moves to the IMF Executive Board for consideration.
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