Pakistan’s Foreign Reserves Rise to $11.4B After IMF Loan Boost

Pakistan has received a big financial boost as its foreign exchange reserves have increased to $11.4 billion. This happened after the country received funds from the International Monetary Fund (IMF).
The money is part of a $3 billion loan agreement with the IMF, known as the Stand-By Arrangement (SBA). This latest payment has given Pakistan some much-needed relief and support for managing its international payments and improving the economy.

• Foreign reserves jump to $11.4 billion, highest level in months

• Boost comes after a fresh IMF tranche disbursement under the SBA

• Aims to stabilize the rupee, reduce inflation, and restore market confidence

• The government is pursuing further bilateral and multilateral inflows

• International investors show renewed interest in Pakistan

The IMF released the final tranche of $1.1 billion after reviewing Pakistan’s fiscal performance, structural reforms, and compliance with agreed conditions. This comes at a critical time as Pakistan continues to battle:

• Soaring inflation

• Currency devaluation

• Low exports

• Energy import costs

• Pressure on the external current account

With the fresh injection, Pakistan’s reserve cover for imports improves significantly, which had previously fallen to alarming levels in early 2024.

“The IMF support sends a positive signal to global markets. It reflects trust in Pakistan’s economic direction,” said Dr. Shamshad Akhtar, former SBP Governor.

As of this week, the State Bank’s official reserves stand at:

• $11.4 billion (total foreign reserves)

• $9.2 billion held by SBP

• $2.2 billion held by commercial banks

This marks the highest level in nearly 18 months, giving the government room to:

• Pay off upcoming debt obligations

• Manage import payments

• Reduce volatility in the currency market

• Stabilizes the Pakistani Rupee against the US dollar

• Encourages foreign direct investment (FDI) and remittances

• Provides support for social safety net programs

• Helps reduce the budget deficit

• Gives a green light to other lenders like the World Bank, ADB, and China

Financial markets responded positively:

• The Pakistan Stock Exchange (PSX) gained over 800 points in intraday trading

• The PKR appreciated by nearly Rs 2 against the US dollar

• Investor confidence rose, with increased activity in the banking and energy sectors

Global financial institutions have welcomed the IMF’s move and expressed renewed interest in engaging with Pakistan:

• World Bank and the Asian Development Bank (ADB) are expected to release delayed funds

• China and Gulf countries are reportedly considering new bilateral arrangements

• Rating agencies like Moody’s and Fitch may revise outlooks if fiscal progress continues

The government is now focusing on:

• Structural reforms in taxation, energy, and governance

• Broadening the tax net to improve revenue collection

• Privatizing loss-making public sector enterprises

• Addressing the circular debt in the power sector

• Promoting exports and remittance inflows to reduce reliance on loans

The upcoming federal budget for 2025–26 is expected to reflect these priorities, with an emphasis on austerity and reform rather than populist spending.

A spokesperson for the Finance Ministry stated:

“Pakistan remains committed to maintaining macroeconomic discipline and completing the structural reform agenda outlined with the IMF. The improved reserves will also help us negotiate better terms with other lenders.”

“While this is good news, Pakistan must not fall back into old habits. The focus should shift from foreign borrowing to domestic productivity.”

“The IMF disbursement has calmed markets for now. But the next six months are crucial — if reforms stall, pressure will return quickly.”

The surge in Pakistan’s foreign reserves to $11.4 billion marks a positive turning point in the country’s economic journey. However, sustaining this momentum will depend on real reforms, fiscal discipline, and export growth.