Pakistan’s Foreign Exchange Reserves Bolstered by IMF Loan

The total liquid foreign exchange reserves of Pakistan experienced a significant increase of $1.034 billion during the past week, primarily due to the disbursement of a loan installment by the International Monetary Fund (IMF).

According to the State Bank of Pakistan (SBP), the influx of funds from the IMF has propelled the nation’s total liquid foreign exchange reserves beyond the $16 billion threshold, reaching $16.649 billion as of May 16, 2025. This represents a substantial rise from the $15.614 billion recorded as of May 9, 2024.

The $16 billion mark was previously attained in November 2024. During the week in question, the SBP’s reserves saw an increase of $1.043 billion, climbing to $11.447 billion, up from $10.403 billion the previous week. The present level of the SBP’s reserves marks a four-month high.

The SBP received the second tranche of SDR 760 million (equivalent to $1.023 billion) from the IMF on May 13, 2025, as part of the Extended Fund Facility (EFF) program. This infusion has contributed to the increase in reserves. However, the net foreign reserves held by commercial banks witnessed a slight decrease of $9 million, settling at $5.202 billion at the week’s end.

The IMF has also sanctioned a Resilience and Sustainability Facility (RSF) program for Pakistan, granting access to approximately $1.4 billion (SDR 1 billion). This initiative aims to enhance the country’s ability to withstand climate-related shocks and foster sustainable growth. The RSF program is an integral component of a larger agreement that encompasses a 37-month Extended Fund Facility (EFF) program, providing $7 billion in financial assistance to support Pakistan’s economic recovery and stabilization efforts.

Furthermore, the release of the IMF tranche is expected to unlock financial inflows from other donors and international institutions.

Jameel Ahmed, the Governor of the SBP, has indicated that the central bank’s foreign exchange reserves are projected to continue their upward trajectory in the coming months, surpassing the $14 billion mark by June 2025. This growth is expected to be fueled by sufficient foreign inflows.