IMF Reaches Staff-Level Agreement with Pakistan on $1.2 Billion Loan Tranche

The International Monetary Fund (IMF) announced on Tuesday that it has reached a staff-level agreement with Pakistan under the Extended Fund Facility (EFF), paving the way for the disbursement of a $1.2 billion tranche upon approval from the IMF’s Executive Board.

In a statement, the IMF said the agreement follows constructive discussions with Pakistani authorities on the continuation of key fiscal and structural reforms aimed at ensuring economic stability and sustainable growth.

Earlier this week, Finance Minister Senator Muhammad Aurangzeb had indicated that the agreement was expected to be finalized within days, confirming that Pakistan and the IMF were engaged in “productive negotiations.”

Under the EFF arrangement, the upcoming $1.2 billion installment will be released after board approval. The finance minister also revealed that Pakistan plans to issue its first-ever Green Panda Bond by the end of this year as part of efforts to diversify funding sources and attract sustainable investment.

Aurangzeb further said that progress has been made on the privatization of the national airline and three power distribution companies. He added that the resumption of flights to Europe and the United Kingdom has made the national carrier more attractive to potential investors, with five international groups reportedly expressing interest in its privatization.

The IMF-Pakistan agreement marks a key milestone in the country’s ongoing efforts to stabilize its economy, strengthen foreign reserves, and restore investor confidence following years of fiscal challenges.