Talks between International Monetary Fund (IMF) and Pakistan concluded on Wednesday without reaching a staff-level agreement (SLA), delaying the disbursement of approximately $1.25 billion under the 37-month Extended Fund Facility (EFF) and the 28-month Resilience and Sustainability Facility (RSF). The IMF’s 11-day mission in Islamabad was closely watched by policymakers and financial markets, given the country’s urgent need to stabilize its external financing position.
The delay is expected to be temporary, as both sides have made substantial progress on key economic and climate-related targets. Financial experts anticipate that the SLA could be finalized within the next two to four weeks, paving the way for the release of funds shortly thereafter.
Saad Hanif, Head of Research at Ismail Iqbal Securities, said he expects the SLA to be reached within two to four weeks, with the next loan tranches likely disbursed within three to six weeks. Similarly, Muammad Awais Ashraf, Director Research at AKD Securities, predicted an agreement by the end of October. Both analysts noted that major issues had already been resolved, and remaining differences were relatively minor.
Ashraf explained that Pakistan will receive two RSF tranches worth SDR 76.9 million each, totaling SDR 153.8 million or approximately $209.7 million, along with $1.036 billion under the EFF. The combined amount of these inflows stands at around $1.25 billion, which would provide critical support to Pakistan’s foreign exchange reserves.
The IMF has emphasized that program implementation remains on track and broadly aligned with the government’s commitments. According to IMF officials, the remaining discussions focus on ensuring fiscal discipline at the provincial level and revising the revenue targets of Federal Board of Revenue (FBR) in light of the economic slowdown caused by recent floods.
Ashraf noted that Pakistan has maintained a positive track record with the IMF under previous programs, which has helped build trust between the two sides. He added that with the option to continue discussions online, pending matters can be settled efficiently in the coming weeks, avoiding further delays in disbursement.
In its official statement, the IMF said: “The IMF mission and the Pakistani authorities made significant progress toward reaching an SLA on the second review under the 37-month Extended Arrangement under the EFF and on the first review of the 28-month arrangement under the RSF. Program implementation remains strong and broadly aligned with the authorities’ commitments.”
This funding is expected to ease pressure on Pakistan’s external account, support its foreign exchange reserves, and strengthen fiscal stability ahead of the next review cycle. However, economists caution that delays in inflows could temporarily affect market sentiment and currency stability.
The SLA, once finalized, will mark another critical step in Pakistan’s ongoing efforts to stabilize its economy through structural reforms, fiscal consolidation, and climate resilience measures, which are core components of its extended engagement with the IMF.
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