KARACHI / ISLAMABAD, May 14 — Pakistan’s foreign exchange reserves have surged past the $17 billion mark following the receipt of $1.3 billion from the International Monetary Fund (IMF). The State Bank of Pakistan (SBP) confirmed on Wednesday that it received the funds under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF). This fresh liquidity brings the central bank significantly closer to its year-end target of $18 billion, providing a much-needed buffer for debt servicing and exchange rate stability as a visiting IMF mission begins a critical pre-budget review in Islamabad.
Pakistan has received about $1.3 billion from the IMF, and the inflow will show up in SBP reserves for the week ending May 15. 🧵 pic.twitter.com/jpNSa49HxT
— ProPakistani (@ProPakistaniPK) May 13, 2026
Quick Facts
- The IMF released SDR 914 million (approximately $1.3 billion) to the State Bank of Pakistan.
- Total SBP foreign exchange reserves have now risen to approximately $17.15 billion.
- A visiting IMF mission has commenced a pre-budget review focusing on the 2026-27 fiscal strategy.
- The central bank has purchased nearly $27 billion from the inter-bank market over the last three years to shore up reserves.
- Foreign Direct Investment (FDI) dropped by 27% during the July-March period of the current fiscal year.
- Remittances remain the primary driver in financing the country’s trade and primary income deficits.
The inflow arrives at a pivotal moment for the federal government as it prepares the 2026-27 budget. The IMF mission is currently evaluating revenue collection targets and proposed tax reforms necessary to maintain the momentum of the $7 billion Extended Fund Facility. While the increase in reserves has bolstered investor confidence and helped stabilize the rupee, the central bank’s report highlighted a worrying trend in declining foreign investment. Despite global FDI flows rising to $1.6 trillion in 2025, Pakistan has struggled to attract long-term capital, with developing economies largely seeing disinvestment in favor of the European Union.
To compensate for the lack of FDI, the SBP has relied heavily on market interventions and robust workers’ remittances. The central bank’s strategy of buying dollars from the inter-bank market has been instrumental in keeping reserves above critical levels, though the target of $18 billion still requires the purchase of nearly $1 billion more from the open market. As Finance Ministry officials engage with the IMF team, the focus remains on bridging the fiscal gap through structural reforms and expanded tax measures to ensure that the recovery in reserves is supported by sustainable economic growth rather than just external borrowing.
