Feb. 26, 2026 | Karachi
An International Monetary Fund (IMF) staff mission arrived in Pakistan this week to conduct crucial reviews of the country’s $7 billion Extended Fund Facility (EFF) and $1.4 billion Resilience and Sustainability Facility (RSF), officials said, marking a pivotal step in the nation’s efforts to maintain macroeconomic stability and secure external financing.
The delegation began meetings in Pakistan’s commercial hub of Karachi, engaging with banking regulators at the State Bank of Pakistan, in what officials described as the formal start of the third review under the EFF and the second review under the RSF. Both reviews are considered essential to determining the disbursement of upcoming tranches under the programs.
“The team is on the ground now,” said an IMF official familiar with the discussions, speaking on condition of anonymity.
The talks are expected to focus on a range of policy areas, including fiscal consolidation, monetary discipline, structural reforms, and climate-related benchmarks linked to the RSF. IMF officials in Washington indicated last week that the review process would formally begin on February 25, with meetings scheduled over the coming fortnight.
Central Bank in Focus
The central bank plays a central role in the review process, particularly in its management of interest rates to keep inflation under control. In January, the State Bank of Pakistan kept its benchmark policy rate at 10.5 percent, defying market expectations for a cut, a move analysts said aligned with IMF program guidance.
“Yes, the IMF team was here yesterday,” a senior SBP official confirmed, declining to comment further on the specifics of the discussions.
IMF Director of Communications Julie Kozack praised Pakistan’s recent policy performance, noting that efforts under the EFF had stabilized the economy and restored investor confidence. Pakistan posted a primary fiscal surplus of 1.3 percent of GDP in fiscal year 2025 and achieved its first current account surplus in 14 years, she said, while headline inflation, though still a concern, had been relatively contained.
Program Objectives
The EFF, secured in 2024, is designed to stabilize Pakistan’s economy through fiscal discipline, structural reforms, and market-determined exchange rates. The RSF complements these measures by supporting initiatives in climate resilience, sustainability, and energy efficiency, reflecting a broader global emphasis on climate-linked economic policies.
Economists note that the upcoming tranche decisions carry significant implications for Pakistan’s economic recovery. “These reviews are not just procedural,” said a Karachi-based macroeconomic analyst. “They affect liquidity, investor confidence, and the country’s ability to access foreign capital markets.”
IMF staff missions typically conclude formal review talks within two weeks, although follow-up discussions often continue virtually if the review is not finalized during the visit.
The delegation’s presence comes amid a period of cautious optimism for Pakistan, as officials seek to consolidate macroeconomic gains while navigating a complex mix of internal and external challenges, including rising energy costs, climate risks, and regional security concerns.
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