IMF funds arrive as govt opens pre-budget talks

Meanwhile, a visiting IMF mission on Wednesday began a pre-budget review of Pakistan’s economy, focusing on revenue collection targets, proposed tax measures, reforms and the fiscal strategy for 2026-27. The Fund approved special drawing rights (SDR) worth 760 million for Pakistan under the Extended Fund Facility (EFF) and SDR 154 million under the Resilience and Sustainability Facility (RSF). “The SBP has received SDR 914m (equivalent to about $1.3bn) under the EFF and RSF in value dated May 12, 2026, from the IMF,” the central bank said on Wednesday. The SBP’s foreign exch­ange reserves have become highly critical for the economy as they help build confidence among importers and exporters, meet the trade deficit, stabilise the exchange rate and support debt servicing payments. In its recent half-yearly report, the SBP revealed it had been buying dollars from the inter-bank market to improve reserves. During the last three years, the central bank purchased about $27bn from the currency market. The SBP’s foreign exchange reserves stood at $15.85bn on April 30. With the inflow of $1.3bn from the IMF, reserves have risen to about $17.15bn. The SBP’s target for FY26 is $18bn, which could now be achieved with purchases of less than $1bn from the currency market. Pakistan, however, has struggled to attract foreign investment, which has been declining for years. Foreign direct investment fell 27 per cent during July-March FY26. According to the SBP, global FDI flows increased 14pc to $1.6 trillion in 2025, primarily driven by the European U