Pakistan has received the second tranche of its $7 billion Extended Fund Facility (EFF) from the International Monetary Fund (IMF), the State Bank of Pakistan (SBP) confirmed on Wednesday. The tranche, amounting to over $1 billion, has been transferred to the central bank and will be reflected in SBP’s foreign reserves on May 16.
This follows the IMF Executive Board’s approval of the programme’s first review on May 9. Alongside the review, the IMF also greenlit a new sustainability-linked loan worth $1.3 billion, set to be disbursed over a 28-month period. The additional funding aims to support Pakistan’s long-term climate resilience and adaptation initiatives. Further details regarding the structure and disbursement timeline of the new loan are expected in the coming weeks.
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The approval came despite rising tensions between Pakistan and India, with cross-border hostilities intensifying in recent days. India had reportedly urged the IMF to reassess financial aid to Pakistan and even terminated Dr. Krishnamurthy Subramanian from his post as IMF Executive Director representing India — a move interpreted by analysts as an effort to disrupt the May 9 review meeting.
Nonetheless, Pakistan remained on track, having met all programme conditions and secured staff-level approval for both the ongoing EFF programme and the new climate-related loan without any additional requirements.
The recent round of talks between the IMF and Pakistan took place from February 24 to March 14 in Karachi and Islamabad, followed by virtual meetings. With the latest disbursement, Pakistan has now received $2 billion under the current $7 billion EFF arrangement.
The timely inflow of funds is expected to bolster Pakistan’s foreign exchange reserves and support economic stability amid ongoing geopolitical uncertainty.
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