ISLAMABAD: The International Monetary Fund (IMF) review mission will begin negotiations with the State Bank of Pakistan (SBP) on Wednesday, starting discussions on the fourth review of Pakistan’s $7 billion Extended Fund Facility (EFF) with a focus on inflation, monetary policy and the exchange rate.
The mission will remain in Karachi this week for discussions with the central bank before arriving in Islamabad on September 28 for negotiations with the Ministry of Finance, Federal Board of Revenue (FBR) and other ministries.
The Islamabad leg of the talks is expected to go ahead provided the situation in the federal capital remains normal.
The negotiations will cover the fourth review under the EFF, the third review under the Resilience and Sustainability Facility (RSF) and the Article IV consultation. The overall review process is expected to continue for around two weeks and assess economic developments and programme performance through June 2026.
The discussions are expected to assess the government’s performance against agreed programme targets, including structural benchmarks and tax reforms, as well as measures in the power and gas sectors. Other fiscal, monetary and structural issues will also form part of the negotiations.
The Article IV consultation will be conducted alongside the programme reviews. The consultation involves an assessment of the country’s broader economic conditions and policies.
The findings of the Article IV consultation are expected to be presented to the IMF Executive Board and subsequently made public alongside the IMF’s review report following completion of the fourth EFF review.
Pakistan and IMF staff will also seek to reach a staff-level agreement on the fourth EFF review and third RSF review during the negotiations.
Any staff-level agreement would subsequently require approval from the IMF Executive Board. Upon approval, Pakistan would gain access to around $1 billion under the EFF and another $200 million under the RSF.
Pakistan has already received around $4.8 billion under the two arrangements.
