IMF approves $1.2b tranche for Pakistan amid reform commitments

The executive board of the International Monetary Fund (IMF) on Friday approved a $1.2 billion loan tranche after Pakistan agreed to meet a dozen new conditions and assured that it would follow the pre-war program targets to continue its journey on the path of stabilization.

However, it was required to remain committed to the old targets of fiscal and monetary policies and make a commitment to the road of stabilization despite the fact that there were powerful voices against these policies because these policies increased unemployment, poverty, and income inequality.

The IMF executive board approved an amendment in one end-June performance criterion, which pertained to the floor of net international reserves of SBP. It has also set the performance criteria for end-December 2026 and end-June 2027 for SBP. The country would use this $1 billion amount for balance of payments support whereas $200 million would be provided in budget support according to officials.

Besides, Pakistan has other access to $1 billion from the Extended Fund Facility and $200 million under the Resilience and Sustainability Facility.

The funds are expected to be dispersed early next week and would increase the reserves of the central bank to above $17 billion.

The IMF mission had reviewed the performance of Pakistan’s economy for the July-December 2025 period, covering the third review of the $7 billion bailout package.

Pakistan met all end-December 2025 quantitative performance criteria and also outperformed against the floor on net international reserves and comfortably met the general government’s primary balance target.