KARACHI: An International Monetary Fund (IMF) staff mission has begun review talks in Pakistan that will determine the release of the next tranche under the country’s $7 billion Extended Fund Facility (EFF) and the $1.4 billion Resilience and Sustainability Facility (RSF), officials familiar with the discussions said on Thursday.

The visit marks the formal launch of negotiations under the third EFF review and the second RSF review, both seen as critical to sustaining Pakistan’s fragile economic recovery and maintaining external financing stability. The discussions are expected to focus on fiscal consolidation, monetary policy, structural reforms and climate-related benchmarks tied to the RSF program.

“The team is on the ground now,” an IMF official told Arab News, requesting not to be named as the talks are ongoing.

The visiting IMF mission began its meetings in Pakistan’s commercial capital, Karachi, where they met banking regulators at the State Bank of Pakistan (SBP), the officials said.

Last week in Washington, IMF Director of Communications Julie Kozack said the staff team would begin review talks with Pakistani authorities from Feb. 25.

The IMF official declined to share details of the review agenda, saying: “It will be hard to answer the rest of your questions as the team is busy with meetings on the ground. We will post a press release at the conclusion of the mission.”

IMF staff missions typically conclude review talks within a fortnight, with any remaining discussions continuing virtually if the review is not finalized during the visit.

Separately, a senior SBP official confirmed the IMF delegation’s presence in Karachi but declined to provide details.

“Yes, the IMF team was here yesterday,” he told Arab News. “They held meetings at the central bank. I don’t know about the details of their discussion but can confirm only this much for now.”

The central bank plays a key role in IMF reviews, as the Washington-based lender has urged Pakistan’s monetary policymakers to maintain interest rates at “appropriately tight” levels to contain inflation, which, though declining from its peak, remains a concern.

The SBP in January defied market expectations for a rate cut and kept its benchmark policy rate at 10.5 percent, a move analysts said aligned with IMF program requirements.

“We don’t have any idea about who is part of the mission, how long they will stay here [in Karachi] and when and who they will meet there [in Islamabad],” the SBP official said.

The IMF communications director said last week that Pakistan’s recent performance under the program had improved.

“Pakistan’s policy efforts under the EFF have helped stabilize the economy and rebuild confidence,” Kozack told reporters in response to a query.

“Pakistan currently has a primary fiscal surplus of 1.3 percent of GDP in fiscal year 2025, which was in line with program targets,” she added. “Headline inflation has been relatively contained. And Pakistan posted its first current account surplus in 14 years in fiscal year 2025.”

The $7 billion EFF program, secured in 2024, aims to stabilize Pakistan’s economy through fiscal discipline, market-determined exchange rates and structural reforms.

The $1.4 billion RSF complements it by supporting climate resilience and sustainability reforms.