In a significant development for Pakistan’s economic landscape, the International Monetary Fund (IMF) has disbursed the second tranche under its Extended Fund Facility (EFF) to the State Bank of Pakistan (SBP). The latest installment, amounting to Special Drawing Rights (SDR) 760 million—equivalent to approximately US$1.023 billion—was officially received by SBP on May 13, 2025.
This disbursement follows the IMF Executive Board’s completion of the first review of Pakistan’s performance under the EFF program, during its session held on May 9, 2025. The Board’s approval marks a crucial milestone in Pakistan’s engagement with the IMF, signaling continued progress and commitment toward economic stabilization and reform.
The Extended Fund Facility is designed to assist countries experiencing serious balance of payments problems due to structural weaknesses. Under this program, Pakistan has committed to implementing a range of fiscal, monetary, and structural reforms. The successful completion of the first review indicates the IMF’s confidence in the country’s current economic direction and its ability to meet the agreed-upon reform targets.
The inflow of US$1.023 billion will be reflected in the SBP’s foreign exchange reserves for the week ending on May 16, 2025. This addition is expected to strengthen the country’s external financial position and provide much-needed support to the foreign exchange market. It is also likely to ease pressure on the Pakistani rupee and help stabilize the overall macroeconomic environment, which has faced multiple challenges in recent years, including inflationary trends and fiscal deficits.
Experts note that the timely release of this tranche comes at a critical juncture, particularly when Pakistan is navigating complex economic pressures and striving to meet its international obligations. With this inflow, the government now has additional fiscal space to address domestic priorities while adhering to reform commitments agreed with the IMF.
This development also enhances investor confidence and could help improve Pakistan’s credit outlook in international markets. A sustained relationship with the IMF under the EFF can act as a buffer for Pakistan’s economy, offering both policy guidance and financial assistance in the face of global uncertainties.
Moreover, the receipt of the second tranche will assist in stabilizing the external account and bolster the SBP’s ability to manage currency volatility, balance of payments concerns, and debt servicing requirements. The State Bank’s reserves are a vital barometer of economic health and play a central role in maintaining financial stability.
With the next phases of the EFF program still ahead, economic analysts suggest that consistent implementation of reforms and prudent fiscal management will be key to unlocking further disbursements. The focus will likely remain on structural adjustments, energy sector reforms, and revenue mobilization, all of which are critical to long-term economic sustainability.
In conclusion, the receipt of SDR 760 million under the IMF’s EFF program marks a pivotal moment for Pakistan’s economic policy execution. It reinforces the country’s trajectory toward fiscal consolidation, economic resilience, and global financial integration.