ISLAMABAD: The International Monetary Fund’s (IMF) Executive Board on Monday approved a $1.29 billion loan disbursement for Pakistan after reviewing the staff-level agreement reached in October under the country’s ongoing reform programme.
The decision follows a staff-level agreement reached in October between Pakistan and the IMF on the South Asian country’s ongoing loan programmes.
The approval includes nearly $1 billion under the $7 billion Extended Fund Facility (EFF) programme and an additional $200 million under the Resilience and Sustainability Facility (RSF), according to local media reports. The IMF board’s approval marks a key step in supporting Pakistan’s economic stabilisation efforts.
Pakistan secured the 37-month EFF programme in September 2024, receiving its first $1 billion tranche the same month. The second tranche, also $1 billion, was released in May 2025.
With the release of these funds, the total disbursement from both loan programmes will reach $3.3 billion, according to local media reports, citing sources. Pakistan had already received two instalments under the EFF programme.
The IMF’s Executive Board has approved the second economic review, according to media reports.
The IMF has described the implementation of the ongoing loan programmes as “strong” and has assured the government of continued support for its economic reforms.
The release of $1.29 billion is expected to further bolster Pakistan’s foreign exchange reserves.
Ahead of the decision, an IMF team, led by Iva Petrova, held discussions in Karachi and Islamabad from September 24 to October 8 and in Washington, DC, to finalise the SLA.
The international lender acknowledged robust programme implementation and underscored the need to sustain fiscal discipline while ensuring support for flood-affected households.
The IMF acknowledged maintaining inflation within the State Bank of Pakistan’s target range, restoring energy sector viability and advancing structural reforms.
The Fund had also noted progress on the RSF-backed climate agenda, emphasising that recent floods underscore the need for consistent, comprehensive reforms to mitigate climate risks.
The RSF component aims to assist Pakistan in building long-term resilience as climate impacts continue to intensify.
The IMF said the combined disbursement aims to support Pakistan’s economic stabilisation, fiscal consolidation and climate-resilience reforms.
With this release, Pakistan moves a step closer to completing its current IMF programme, while also strengthening buffers for climate-related risks through the RSF window.
Ahead of the financing decision, the IMF released its Governance and Corruption Diagnostic report. It warned that entrenched corruption and weak institutions are impeding the country’s development, even as stabilisation efforts continue under the EFF.
“Corruption is a persistent challenge in Pakistan, with significant adverse implications for economic development,” the report noted.
The report found that persistent governance failures undermine public spending, revenue collection and confidence in the justice system.
It added that citizens often face continuous informal payments for basic services, while economic and political elites have historically captured public benefits at the expense of broader progress.
