Third economic review; State Bank officials brief IMF delegation

KARACHI/ISLAMABAD (Dunya News) – Pakistan and IMF (International Monetary Fund) have been reviewing the economic situation for the second day on Thursday and the State Bank (SBP) officials briefed the visiting delegation.

According to sources, Pakistan and the IMF delegation have been discussing the data shared for the first half of the current fiscal year. The IMF delegation has key meetings scheduled until Friday, and the State Bank officials have provided a briefing to the IMF team.

The IMF delegation has two more important meetings scheduled today and tomorrow. Today, the IMF team will meet with officials of the Overseas Investors Chamber of Commerce, while tomorrow it will meet with officials of the Pakistan Business Council.

The delegation is expected to depart for Islamabad on Saturday. It has come to Pakistan for the third economic review under the Extended Fund Facility programme. From Monday, technical-level negotiations between the IMF delegation and Ministry of Finance officials will be held in Islamabad.

Similarly, the delegation will hold talks with the Khyber Pakhtunkhwa government in the first week of March. The discussions between the IMF and Khyber Pakhtunkhwa officials will also be at the technical level.

According to State Bank sources, the agreed External Financing Plan with the IMF is being implemented, and the government is engaging in further talks regarding temporary rollover arrangements.

Pakistani officials have held discussions with the IMF delegation on foreign exchange reserves, monetary policy, the exchange rate, and anti-terror financing. Technical-level discussions have also taken place on anti-money laundering measures, banking regulations, and other key matters.

The State Bank Governor, along with senior management, briefed the delegation. The IMF team will continue technical-level discussions with central bank officials in Karachi over the next two days.

ROLLOVER

Earlier, the IMF delegation asked Pakistani authorities to ensure that the UAE rolls over its $2 billion deposit with the State Bank (SBP) for at least one year as discussions continue under the ongoing review of the country’s external financing programme.

Well-placed sources said that the IMF officials asked questions during technical talks with central bank authorities regarding the status of the UAE’s $2 billion deposit which has yet to receive a formal written confirmation for a one-year rollover. The SBP officials reportedly assured the delegation that positive progress is expected during the course of negotiations.

There is also a possibility of a meeting between IMF representatives and the UAE ambassador in this regard.

Uncertainty surrounding the rollover has added to the financial pressures on the government. Deputy Prime Minister and Foreign Minister Ishaq Dar informally stated that the UAE would not withdraw the $2 billion from Pakistan’s foreign exchange reserves and that discussions for rollover are ongoing. He expressed confidence that the renewed arrangement would likely be for a longer duration.

Finance Minister Muhammad Aurangzeb also confirmed after a meeting of the National Assembly’s Standing Committee on Finance that Pakistan is in contact with the UAE over the rollover and is implementing the external financing plan agreed with the IMF.

Responding to media queries he remarked that the government not the media should be concerned about the matter adding that negotiations with the UAE were underway.

A senior government official, speaking on condition of anonymity, confirmed that the government was engaged in further talks to extend the deposits.

During technical sessions in Karachi, IMF officials and SBP authorities discussed foreign exchange reserves, monetary policy, exchange rate management, anti-terror financing and anti-money laundering measures, as well as banking regulations. The delegation is scheduled to continue talks with central bank officials for two more days.

Officials informed the IMF that Pakistan’s current account posted a surplus of $121 million in January compared to a deficit of $393 million in January 2025. During the first seven months of fiscal year 2026, the current account recorded a deficit of $1.74 billion, against a surplus of $564 million during the same period last year, indicating mounting pressure on external accounts.

Sources revealed that the UAE currently holds $3 billion in deposits with the SBP. Of this, two $1 billion tranches matured in January and were initially rolled over for short periods. The latest two-month extensions are set to expire in mid and late April. The third $1 billion tranche is also approaching maturity and is expected to be rolled over.

The delegation is also scheduled to meet representatives of the Overseas Investors Chamber of Commerce and Industry during its stay in Karachi as part of the ongoing review process.