Pakistan is set to approach the International Monetary Fund (IMF) to seek an expansion of its existing $7 billion Extended Fund Facility (EFF), as external financing pressures intensify following regional geopolitical tensions and their economic spillover.
According to official sources, the matter has been discussed at the Prime Minister’s Office and the Ministry of Finance, where authorities are reviewing options to increase the size of the ongoing IMF programme, which is scheduled to continue until September next year.
The move comes amid renewed strain on Pakistan’s foreign exchange position. Officials pointed to a reported $3.5 billion shortfall in reserves after some expected rollover support from the United Arab Emirates was not fully extended, creating an immediate financing gap.
At the same time, Saudi Arabia has increased its financial backing by placing an additional $3 billion deposit and extending an earlier $5 billion facility, raising total Saudi support held with the State Bank of Pakistan to around $8 billion.
Sources said the government is now considering requesting an additional $2 billion to $2.5 billion from the IMF under the current arrangement to help manage rising import costs, inflationary pressure, trade disruptions, and reduced external inflows linked to the regional conflict.
Finance Minister Muhammad Aurangzeb has already raised Pakistan’s external financing needs during recent meetings with IMF officials in Washington, including discussions on programme continuity and the impact of external shocks on the economy.
Pakistan has so far received about $4 billion under the current IMF programme. Officials believe remaining quota space within the arrangement could allow for additional disbursements if the programme is expanded.
The government is also exploring the possibility of front-loading any additional IMF support to provide quicker relief to foreign exchange reserves and stabilise market sentiment, rather than receiving funds in phased instalments.
An IMF mission is expected to visit Pakistan next month for budget discussions, where talks on taxation measures, fiscal targets, and possible programme expansion are also likely to take place.
