The IMF mission started technical discussions with the State Bank of Pakistan (SBP) on Wednesday. The initial talks are focusing on monetary policy, inflation, the current account, interest rates and the exchange rate.

Pakistan is expected to brief the IMF on its economic performance through June 2026, progress under structural benchmarks and key reform targets. Discussions will also cover foreign exchange reserves, foreign investment and recent external financing developments.

The review is part of the ongoing $7 billion Extended Fund Facility (EFF), along with the Resilience and Sustainability Facility (RSF). The IMF mission is expected to remain in Pakistan for around two weeks.

Energy reforms and circular debt on agenda

After the initial State Bank discussions, the mission is expected to engage with the Ministry of Finance, Federal Board of Revenue (FBR), energy and other government departments.

Energy-sector reforms are likely to be a major part of the negotiations, including targets related to circular debt in the electricity and gas sectors. Tax reforms and other structural benchmarks will also be reviewed.

If the review is successfully completed and approved, Pakistan could receive around $1 billion under the fifth EFF tranche and another $200 million under the RSF, bringing the potential financing to about $1.2 billion.