File photo. Saul Loeb—AFP
The International Monetary Fund (IMF)’s Executive Board on Monday approved the release of a final tranche of $1.1 billion for Pakistan under the $3 billion Stand-By Arrangement (SBA).
“The Executive Board of the International Monetary Fund (IMF) completed the second and final review of Pakistan’s economic reform program supported by the IMF’s Stand-By Arrangement (SBA),” read the official statement issued on the lender’s website after a meeting of the Executive Board. “The Board’s decision allows for an immediate disbursement of SDR 828 million (around $1.1 billion), bringing total disbursements under the arrangement to SDR 2.250 billion (about $3 billion),” it added.
“Pakistan’s determined policy efforts under the 2023 Stand‑By Arrangement have brought progress in restoring economic stability. Moderate growth has returned; external pressures have eased; and while still elevated, inflation has begun to decline. Given the significant challenges ahead, Pakistan should capitalize on this hard‑won stability, persevering—beyond the current arrangement—with sound macroeconomic policies and structural reforms to create stronger, inclusive, and sustainable growth. Continued external support will also be critical,” said Antoinette Sayeh, Deputy Managing Director and Chair of the Executive Board.
“The State Bank of Pakistan’s tight monetary policy stance remains appropriate until inflation returns to more moderate levels. Further improvements in the functioning of the foreign exchange (FX) market, together with a market‑determined exchange rate, will help buffer external shocks and attract financing, thereby supporting competitiveness and growth. The significant rebuilding of FX reserves under the SBA needs to continue. Moreover, stronger action to address undercapitalized financial institutions and, more broadly, vigilance over the financial sector are needed to ensure financial stability,” she added.
The statement said Pakistan was likely to receive the loan payment within this week.
Inked last year, the $3 billion SBA helped Pakistan avert sovereign default and was considered key to stabilizing the economy. Pakistan has already expressed a desire to enter into a new extended fund facility, with Finance Minister Muhammad Aurangzeb saying a team of the lender would visit Islamabad next month to iron out details.