Pakistan has secured a $1.2 billion loan from the International Monetary Fund. IMF on Tuesday said that it has reached a staff-level agreement with the South Asian country under its ongoing loan program, paving the way for Islamabad to access $1.2 billion pending approval from the Fund’s Executive Board.According to the official statement issued by the IMF, Pakistan will receive $1 billion through the Extended Fund Facility (EFF) and another $200 million under the Resilience and Sustainability Facility (RSF), taking the total disbursements under both programs to about $3.3 billion.”The IMF team has reached a staff-level agreement with the Pakistani authorities on the second review of the 37-month Extended Arrangement under the Extended Fund Facility (EFF) and the first review of the 28-month arrangement under the Resilience and Sustainability Facility (RSF). The staff-level agreement is subject to approval by the IMF Executive Board. Upon approval, Pakistan will have access to about US$1.0 billion (SDR 760 million) under the EFF and about US$200 million (SDR 154 million) under the RSF, bringing total disbursements under the two arrangements to about US$3.3 billion,” the IMF said in an official statement.
IMF says stability returning
“Supported by the EFF, Pakistan’s economic program is entrenching macroeconomic stability and rebuilding market confidence,” the IMF said in its statement. The Fund noted that the country’s recovery “remains on track,” citing contained inflation, stronger external buffers, and improving financial conditions reflected in narrowing sovereign spreads.IMF officials said the next tranche would be released once the board signs off on the review — a standard step in the Fund’s lending framework, where loan disbursements follow successful periodic assessments.”The recovery remains on track, with the FY25 current account recording a surplus—the first in 14 years, the fiscal primary balance surpassing the program target, inflation remaining contained, external buffers strengthening, and financial conditions improving as sovereign spreads have narrowed significantly,” it added.
Pakistan pledges fiscal discipline, climate focus
Pakistan has committed to maintaining a tight and data-dependent monetary policy and strengthening climate resilience — a key demand from the IMF after the floods devastated large parts of the country.”The authorities reaffirmed their commitment to the EFF- and RSF-supported programs, and to maintaining sound and prudent macroeconomic policies while advancing ongoing structural reforms,” the statement added. Finance minister Muhammad Aurangzeb said earlier in the day that Pakistan was close to finalising the agreement after an IMF team concluded its review visit last week. “The staff-level deal marks a major step forward,” he told reporters, according to Reuters, signalling renewed investor confidence.
Plans to return to bond markets
Aurangzeb also revealed that Pakistan plans to return to international capital markets, starting with its first-ever green bond denominated in Chinese yuan before the end of 2025. This will be followed by a $1 billion international bond, as Islamabad seeks to diversify its financing sources. Go to Source
