Pakistan to seek $2–2.5 billion increase in $7 billion IMF programme: report

Pakistan is considering requesting the International Monetary Fund (IMF) to increase the size of its existing $7 billion bailout programme, as it faces pressure on foreign exchange reserves following external financing gaps, The Express Tribune reported, citing official sources. 

The move comes after Saudi Arabia committed $3 billion in fresh deposits, with disbursement expected within a week, while also extending the tenure of its existing $5 billion support beyond the earlier annual rollover arrangement. 

Officials said discussions have taken place at the Prime Minister’s Office and the Ministry of Finance on expanding the Extended Fund Facility, which is due to run until September next year. Pakistan has so far received $4 billion under the programme and expects approval of the next $1 billion tranche soon.

A financing gap of about $3.5 billion has emerged in official reserves after the United Arab Emirates (UAE) did not roll over its deposits despite earlier commitments linked to the IMF programme.

With the latest Saudi inflow, total deposits placed by the kingdom with Pakistan’s central bank will reach $8 billion, making it the largest bilateral contributor.

Government sources said Pakistan is exploring the option of securing an additional $2 billion to $2.5 billion under the existing IMF arrangement, citing eligibility to draw up to 600% of its quota. The country has already utilised around 350% of its quota, amounting to $9.5 billion.

Officials said the IMF is likely to consider the request in light of the economic impact of the Middle East conflict, which has affected energy procurement, logistics and broader macroeconomic indicators, including inflation, growth, exports and remittances.

The government is also assessing whether additional funds could be front-loaded or released in tranches, while noting that higher borrowing from the IMF would increase interest costs and surcharges.

Finance Minister Muhammad Aurangzeb raised the issue of additional financing and programme continuity with IMF leadership during meetings in Washington, where he also called for a review of surcharge policies on IMF lending.

Pakistan is aiming to maintain foreign exchange reserves at around $18 billion, equivalent to about 3.3 months of import cover, by the end of the fiscal year, supported by inflows from friendly countries and multilateral lenders.

The IMF mission is expected to visit Pakistan next month to review the budget and ongoing programme, including taxation measures and financing requirements.