Pakistan Awaits IMF Verdict on $2.3 Billion in Loan Approvals

Islamabad: The International Monetary Fund (IMF) Executive Board is set to convene on Friday, May 9, to assess Pakistan’s progress under the ongoing $7 billion Extended Fund Facility (EFF) and to deliberate on a proposed $1.3 billion climate resilience loan.

According to the IMF’s published calendar, the meeting will cover the first review of the 37-month EFF and consider the approval of a new 28-month climate resilience initiative. If endorsed, Pakistan is expected to receive $1 billion as the second EFF tranche and an additional $1.3 billion under the climate-related programme.

This follows a staff-level agreement finalized in March after discussions between the IMF mission, led by Nathan Porter, and Pakistani officials during their visit to Karachi and Islamabad from February 24 to March 14. The agreement was later concluded through virtual negotiations.

The proposed climate resilience programme aims to strengthen Pakistan’s capacity to respond to climate change-related challenges, support adaptation strategies, and enhance long-term economic stability.

Originally approved in September 2024, the EFF is a critical component of Pakistan’s economic reform agenda, providing both financial assistance and strategic policy guidance amidst economic uncertainties and external financing gaps.

As of April 18, the State Bank of Pakistan reported foreign reserves at $10.21 billion, marking a weekly decline of $367 million. Combined national reserves, including commercial banks, stood at $15.44 billion.

If approved, the dual funding is anticipated to boost market confidence and offer essential support to Pakistan’s balance of payments as the country strives for economic recovery and resilience.