In a significant development for Pakistan’s macroeconomic landscape, the State Bank of Pakistan (SBP) has received the second tranche of funding under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) program. The disbursement follows the successful completion of the first review by the IMF Executive Board, which convened on May 9, 2025.
The IMF Board’s approval has resulted in the immediate release of SDR 760 million, equivalent to approximately US$1.023 billion, to Pakistan. This amount was credited to the SBP’s account on May 13, 2025, and will be officially included in the central bank’s foreign exchange reserves for the week ending May 16, 2025.
This disbursement comes at a critical time as Pakistan continues to face economic challenges, including pressure on its foreign exchange reserves and fiscal imbalances. The addition of over one billion US dollars is expected to provide much-needed relief to the country’s external account and support broader macroeconomic stability.
The Extended Fund Facility, originally designed to help countries facing balance of payments crises, is aimed at supporting Pakistan’s economic reform agenda. The EFF includes a series of structural benchmarks and performance criteria meant to bring about improvements in fiscal discipline, monetary policy transparency, and the overall governance of public financial management.
The successful completion of the first review suggests that Pakistan has met the necessary requirements and targets set out in the EFF agreement. This marks a positive step forward in the country’s economic roadmap and could potentially build investor confidence while paving the way for future tranches under the program.
For the SBP, the inflow will bolster its ability to manage external debt repayments and stabilize the currency, both of which are crucial for maintaining the country’s financial integrity. It also gives policymakers some breathing space to focus on long-term economic reforms and growth strategies.
The IMF’s support, while conditional, is often seen as a vote of confidence in a country’s commitment to financial reforms. For Pakistan, maintaining compliance with the EFF program will be essential in securing future disbursements and keeping the reform process on track.
In recent years, Pakistan has relied on multilateral funding sources to address fiscal and external imbalances. The continuation of such support underscores the importance of sustained policy implementation and economic discipline to navigate a complex and evolving global economic environment.
The receipt of this second tranche under the EFF program highlights a coordinated effort between Pakistan’s financial authorities and international stakeholders to steer the economy towards stability and resilience. As the SBP prepares to reflect this inflow in its upcoming reserves data, analysts and market watchers will be closely monitoring how the funds are managed and what implications they may have for monetary policy in the near term.