State Bank receives $1.3b IMF disbursement

Support continues amid structural reform conditions; gold up Rs1,100/tola

KARACHI:

The State Bank of Pakistan (SBP) has received $1.3 billion under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) from the International Monetary Fund (IMF).

The IMF Executive Board completed the third review under the EFF in its meeting held on May 8 and approved the disbursement of SDR 760 million for Pakistan. Furthermore, the IMF board also approved the disbursement of the second tranche of SDR 154 million under the RSF. Accordingly, the SBP received SDR 914 million (equivalent to about $1.3 billion) under the EFF and RSF on Wednesday.

Pakistan's ongoing IMF programme focuses on maintaining macroeconomic stability and implementing key structural reforms. Authorities are required to sustain a primary budget surplus through fiscal consolidation, broaden the tax base, strengthen FBR operations, and ensure a strict spending discipline. The FY27 federal budget must also be prepared in line with the programme's targets.

In the energy sector, timely tariff adjustments, full cost recovery, and regular fuel price pass-through remain critical conditions under the programme. Structural reforms include SOE restructuring, privatisation efforts, public procurement improvements, and SEZ policy changes.

Under the RSF, progress on climate resilience, disaster management, and water sector reforms is expected. All future disbursements will depend on meeting these quantitative targets and structural benchmarks in the upcoming reviews.

Meanwhile, the rupee posted a marginal increase of Rs0.01 against the US dollar in the interbank market on Wednesday, closing at 278.65 compared to 278.66 the previous day.

Furthermore, gold prices in Pakistan declined in line with a fall in the international bullion market, although analysts said the precious metal continued to trade within a strong range amid geopolitical and economic uncertainty.

In the local market, the price of gold per tola decreased by Rs1,100 to settle at Rs491,362, according to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association. Similarly, the price of 10-gram gold fell by Rs943 to Rs421,263. A day earlier, gold prices had surged by Rs4,100 per tola to close at Rs492,462, reflecting volatility in both domestic and international markets. In the global market, gold prices slipped by $11 to $4,690 per ounce, including a premium of $20, amid cautious investor sentiment and easing geopolitical concerns. Meanwhile, silver prices in the domestic market increased by Rs231 to reach Rs9,139 per tola. Interactive Commodities' Director Adnan Agar said international gold prices traded between a high of $4,726 and a low of $4,669 during the day, while the market was later hovering around $4,700 per ounce.

He noted that gold had remained range bound between $4,500 and $4,850 for the past two months. Agar said a breakout above $4,850 could push prices towards $4,900 and even $5,000, while easing tensions in the US-Iran conflict and higher Indian import duties on gold and silver could weigh on prices in the coming days.