IMF mission begins third review talks with Pakistan, meets central bank officials

ISLAMABAD: A mission from the International Monetary Fund began discussions with Pakistani authorities as part of the third review of the country’s $7 billion Extended Fund Facility (EFF), holding initial meetings with officials at the State Bank of Pakistan.

The talks, scheduled to run from February 25 to March 11, will assess Pakistan’s economic performance under the EFF programme and a separate $1.1 billion Resilience and Sustainability Facility (RSF), according to the Finance Ministry.

Central bank officials briefed the IMF delegation on key economic indicators, including foreign exchange reserves, monetary policy, inflation trends and banking sector regulations. Technical-level sessions focused on data sharing covering the July–January period of the current fiscal year, sources familiar with the discussions said.

The IMF has set a target for Pakistan to raise the State Bank’s foreign exchange reserves to $17.8 billion by June 30. Officials discussed recent improvements in reserves, anti-money laundering and counter-terrorism financing measures, as well as the policy rate outlook.

Finance Minister Muhammad Aurangzeb said the government would hold “detailed discussions on all targets” agreed with the IMF, adding that Pakistan’s economic situation had improved compared with last year.

He expressed hope that legislation related to cryptocurrency and tokenisation would be approved soon, bringing digital assets into a regulatory framework.

The review also covers fiscal reforms, tax revenue performance, energy sector restructuring and governance measures.

The government has assured the IMF it will introduce new public procurement rules by June to enhance transparency and ensure state-owned enterprises are not given preferential treatment. Officials said an e-procurement system would also be implemented as part of broader governance reforms.

Pakistan secured the $7 billion EFF last year to stabilise its economy after facing a balance of payments crisis and dwindling reserves. Successful completion of the third review would unlock around $1 billion under the EFF and approximately $200 million under the RSF, subject to IMF Executive Board approval.

Pakistan has undertaken fiscal consolidation measures, tightened monetary policy and implemented structural reforms in a bid to contain inflation, rebuild reserves and restore investor confidence.

However, it continues to face challenges including revenue shortfalls, external financing needs and energy sector liabilities.

The outcome of the review will be closely watched by investors and credit rating agencies as Islamabad seeks to sustain macroeconomic stability and maintain access to external financing.