IMF board meeting in mid-May to unlock $1.2bn for Pakistan

WASHINGTON: Pakistan is set to see a significant easing of liquidity pressures as the International Monetary Fund (IMF) Executive Board prepares to meet in mid-May to approve a fresh disbursement of approximately $1.2 billion.

The upcoming inflow follows a Staff-Level Agreement (SLA) reached on March 28, marking the successful conclusion of the third review under the Extended Fund Facility (EFF) and the second review of the Resilience and Sustainability Facility (RSF). Finance Minister Muhammad Aurangzeb, who is leading a delegation at the Spring Meetings of the Bretton Woods institutions, confirmed that the mid-May review would unlock the next tranche, providing a vital boost to the country's external financing outlook.

During a series of high-level engagements in Washington, the Minister highlighted Pakistan's strengthening economic position, pointedly noting the successful repayment of a $1.4 billion Eurobond earlier this month. This, along with an additional $3 billion in financial assistance from Saudi Arabia and the extension of a $5 billion deposit until 2028, has bolstered the country's repayment capacity and external account management.

In meetings with senior US Treasury, UK, and Japanese officials, as well as representatives from JICA and the Asian Infrastructure Investment Bank (AIIB), Aurangzeb pitched a rigorous reform agenda. Key initiatives include the introduction of AI-based monitoring and digital compliance tools for tax administration, alongside the transformation of the Benazir Income Support Programme through digital public infrastructure.

Discussions with S&P Global Ratings and Citibank centered on Pakistan’s return to international capital markets, with the Minister outlining plans for Panda bond issuance and sukuk instruments. While the current EFF is scheduled to run through 2027, officials noted that while consultations are ongoing, no formal decision has been made regarding a new IMF arrangement once the current cycle concludes.