Pakistan's $1.2bn IMF tranche still awaiting board approval on 18 October

What the staff deal covers

The staff-level agreement covers two reviews at once. It covers the fourth review under the $7 billion EFF and the third under the $1.4 billion RSF [3].

For Pakistan, board approval would release about $1.21 billion. It would lift cumulative disbursements under the two arrangements to around $5.7 billion [8].

The deal reached on 7 October would give Islamabad about $1 billion under the EFF and $210 million under the climate-focused RSF. That is roughly $1.21 billion in total [8]. Moneycontrol reported the same split, with board approval still pending [7]. Iva Petrova, the IMF mission chief, said Pakistani officials had managed the impact of the Middle East conflict. She said strong policies had helped preserve macroeconomic stability [9]. The Executive Board has not voted [9].

OneIndia reported on 18 October that Pakistan was still waiting for approval [5].

The finance ministry did not share further details of the mission's terms when the talks were announced [3]. The IMF's resident representative, Mahir Binici, told Arab News that the team had started discussions on the EFF and RSF reviews. He said those discussions ran alongside an Article IV consultation [4]. The talks opened formally on 29 September. Finance Minister Muhammad Aurangzeb held a kick-off meeting with the mission led by Petrova [6]. The RSF is not a disaster fund. It pays for changes to disaster planning, water management and the way climate risks are weighed in public investment [4].

Why the tranche matters to reserves

Reserves reached about $21 billion at end-September 2026, OneIndia reported [5].

That is up from $16 billion at end-December 2025 and $14.5 billion at end-June 2025, according to the IMF's May review statement [2]. The fund released about $1.1 billion under the EFF and $220 million under the RSF in May. That took cumulative disbursements to roughly $4.8 billion at that point [2][3]. Board approval would push that to about $5.7 billion [8]. Pakistan remains reliant on external financing to bolster reserves and meet debt repayments, the fund said [8]. It said it expected reserves to keep rebuilding over the medium term. It cited programme financing and policy discipline [2].

Pakistan's current account was broadly balanced in the first nine months of fiscal 2026, the IMF said in May [2].

The conditions attached

The fund wants tight macroeconomic policy and faster structural reform [2]. Its stated aim is to help the country absorb further shocks [2].

Its priorities include raising revenue through tax policy simplification and base broadening. They also include energy reforms aimed at restoring viability [1]. The IMF has credited timely power tariff adjustments with reducing the stock and flow of circular debt. It says more work is needed on production and distribution costs [1]. The programme covers power sector finances and state-owned firms too [3]. Higher global commodity prices passed through into domestic energy tariffs. The fund described those as necessary adjustments in administered prices [2].

The fund's December 2025 review listed further steps [1]. A wider tax base and better governance were among them [1].

What it costs households

Headline inflation peaked in May and moderated to about 10.3% in September 2026, Petrova said [9]. Core inflation stayed contained [9].

Real GDP grew 4% in the first three quarters of fiscal 2026. Higher energy prices and supply disruptions weakened momentum [9]. The full year is estimated at 3.6% [9]. Prime Minister Shehbaz Sharif's government has tried to cushion the pass-through. A relief scheme announced in September gives Rs100 per litre off petrol for motorcycles, three-wheeler rickshaws and cars up to 800cc [6]. Sharif said the IMF had not raised serious concerns about the targeted subsidy [6]. Demonstrators have still held protests in major cities over food, fuel and rent prices, Gulf News reported [9].

A borrower with a chair

Pakistan has had at least 25 IMF loan programmes since joining the fund in 1950 [5].

The current EFF is a 37-month arrangement approved in September 2024 [3]. The RSF was approved in May 2025 [4]. In 2027 Islamabad will chair the Boards of Governors of the IMF and World Bank Group. It will be the first time since 1953 [5]. The post carries diplomatic weight but no control over lending decisions [5].

What happens next

The Executive Board still has to approve the staff-level agreement before any money moves [8][9].

A board vote would also clear publication of the Article IV report [6]. No date for that vote has been published. The IMF's May statement said external conditions had become more difficult because of geopolitical tensions [2]. It said shocks from the Middle East war showed the importance of strong policies [2]. The fund also flagged volatile energy prices, tighter global financial conditions and trade disruptions as risks [8].