ISLAMABAD (MNN); The Executive Board of the International Monetary Fund (IMF) on Monday approved the release of $1.3 billion for Pakistan under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF), marking a significant step forward in the country’s ongoing bailout programme.
The approval includes two loan instalments: the third EFF tranche of $1 billion and the first RSF tranche of $300 million, focused on climate resilience. According to official information, the full amount will be disbursed to Pakistan immediately.
Pakistan entered the 37-month EFF arrangement in September 2024 and received the first $1 billion tranche the same month. The second $1 billion tranche was released in May 2025. The latest approval comes after a staff-level agreement reached in October following rounds of negotiations in Karachi, Islamabad and Washington. This agreement covered parallel reviews of both the EFF and RSF programmes.
The IMF said the combined disbursement would support Pakistan’s economic stabilisation, fiscal discipline and climate-related reforms. With this release, Pakistan moves closer to completing the current IMF programme while strengthening its capacity to manage climate risks through the RSF.
Under the $7 billion EFF programme, Pakistan is expected to receive more than $1 billion, including the first tranche of over $200 million under the $1.3 billion Rapid Financing Instrument (RFI), sources said. The latest disbursement will push total releases under the EFF and RSF to $3.3 billion.
Sources confirmed that the IMF Executive Board has approved the second economic review, while the Fund has praised Pakistan’s implementation of the programme as “strong”, assuring continued support for reforms. The $1.29 billion disbursement is expected to help strengthen the country’s foreign exchange reserves.
An IMF delegation led by Iva Petrova held talks in Karachi and Islamabad from September 24 to October 8, and later in Washington, to finalise the staff-level agreement. The Fund highlighted key priorities, including maintaining fiscal discipline while supporting flood-affected households, keeping inflation within the State Bank’s target range, restoring the energy sector’s financial health and advancing structural reforms.
It also acknowledged progress on the RSF climate agenda, noting that recent floods underscore the urgency of comprehensive reforms to reduce climate-related vulnerabilities.
Ahead of the Board meeting, the IMF published its Governance and Corruption Diagnostic (GCD) report, warning that entrenched corruption and weak institutions continue to impede Pakistan’s economic development despite recent stabilisation under the EFF.
“Corruption is a persistent challenge in Pakistan, with significant negative implications for economic development,” the report stated. It noted that weak anti-corruption controls had undermined public spending, tax collection and trust in the legal system.
The report added that citizens often have to make repeated payments to officials to access basic services, while funds lost to corruption could otherwise boost production and development. It further observed that political and economic elites have hindered progress by capturing policies and diverting public resources for personal benefit.
