IMF Says It's Satisfied With Pakistan's Progress as Review Moves to Policy-Level Talks

The International Monetary Fund's review mission has told Pakistani officials it is satisfied with the country's economic performance so far, after wrapping up three days of technical-level talks in Karachi and preparing to move to Islamabad for formal policy-level negotiations starting September 28, 2026.

What the technical phase covered

Over three days in Karachi, the IMF team met with State Bank of Pakistan officials and the Sindh government. SBP's briefing walked the mission through foreign exchange reserves, monetary policy, import trends and developments in the foreign exchange market. The central bank told the IMF that reserves have been maintained above $17 billion — the level the program requires — and the mission said it was satisfied with what it heard. We covered the start of this review cycle when talks began September 23, with Pakistan reported to be on track on six of seven quantitative targets at that point; the reserves confirmation this week closes out one of the more closely watched of those benchmarks.

Why the shift to Islamabad matters

The review is structured in two phases for a reason: technical-level talks establish the factual baseline — what the numbers actually show — before policy-level negotiators start bargaining over what happens next, including any new conditions, financing amounts, or program adjustments. That policy-level phase is where the harder conversations happen, and it's also typically where the timeline for the next loan tranche gets fixed. Formal negotiations on the fourth review of the $7 billion Extended Fund Facility and the third review of the Resilience and Sustainability Facility were scheduled to begin September 28 in the capital.

The reserves number, in context

Foreign exchange reserves sitting above $17 billion is not just an IMF box to tick — it's the buffer that determines how much room Pakistan has to absorb external shocks, from oil-price swings tied to the ongoing US-Iran war to swings in remittance flows. That reserves position has been improving through 2026, as we've detailed in our coverage of record remittances and reserves. The IMF mission's satisfaction with this week's briefing is an early, informal signal — not a formal sign-off, which only comes once the full review concludes and goes to the IMF's Executive Board — but it's the kind of signal that tends to matter to how international lenders and investors price Pakistani risk in the meantime.

What else is on the table in Islamabad

Beyond the headline numbers, the IMF mission is also expected to take up proposed amendments to Pakistan's Sovereign Wealth Fund law, part of the governance and fiscal-safeguard reforms tied to the broader program. We've covered those amendments in more detail separately. SBP's own monetary policy decisions — which lean heavily on the same reserves and inflation data the IMF is reviewing — filter down into the interbank lending rate that prices variable loans across the economy, explained in our KIBOR primer.

Build Better Pakistan's Economy Desk is tracking the IMF review talks and will update this piece as the policy-level discussions in Islamabad conclude.