ISLAMABAD: An Int­e­rnational Monetary Fund (IMF) mission led by Iva Petrova on Wednesday started technical-level discussions with the State Bank of Pakistan (SBP) in Karachi for the third review of the $7 billion Extended Financing Facility (EFF) and the second review of the $1.1bn Resilience and Sust­ainability Facility (RSF).

The mission will remain in Karachi this week and begin policy discussions with the federal and provincial governments on Monday, with the customary opening round-up with Finance Minister Muhammad Aurangzeb. The minister on Wed­nesday said the government was well positioned for a successful review.

Talking briefly to journ­alists after a parliamentary committee meeting, the mi­nister said the governm­ent was also in a good position on Federal Board of Revenue (FBR) collections.

Responding to a question, he said there was “absolutely no issue” with the rollover of the United Arab Emirates’ (UAE) safe deposits with the central bank and the sides were in constant contact. The UAE’s $2bn deposit, usually rolled over annually, had expired more than two months ago and has since been on short-term rollovers.

Deputy Prime Minister and Foreign Minister Ishaq Dar also spoke about the matter during a media talk, assuring that the UAE’s $2bn deposit would be rolled over.

“Talks are ongoing with the UAE government regarding the rollover,” he said, adding that the deposits would be “automatically rolled over”.

Pakistan has been dependent on continuous annual rollovers of safe deposits from China, Saudi Arabia and the UAE, as $12.5bn from these countries form part of the foreign financing needs under the EFF.

During the almost two-week IMF review ending March 11, the engagements will be of greater significance as both sides will also discuss programme performance for the half-year ending Dec 31, 2025. Moreover, forward-looking preparations, including budget proposals based on the performance for this year and the setting up of broad contours of the upcoming budget will also come under discussion.

This would involve provincial reviews for now and the future, particularly those relating to provincial finances, including agriculture income tax and governance-related challenges, as well as an action plan to address those weaknesses causing trillions of rupees worth of economic losses.

In this regard, procurement and accountability agencies would be under added scrutiny, including their independence, institutional capacities, processes and performances.

The programme’s performance as of the end of December 2025 — the period under review — has mostly been up to the mark, albeit with a revenue shortfall, which authorities believe can be reduced following a recent decision by the Federal Constitutional Court regarding the super tax, which was in the government’s favour.

The two sides will also review all macroeconomic indicators for the third quarter still in progress.

The power sector will also remain under added scrutiny given volatile policymaking in the recent months, including those relating to the industrial sector, residential fixed charges and so on, although circular debt numbers are within the target range.

On the positive side, Pakistan has met almost all quantitative performance criteria for the period under review. However, it is lagging behind in indicative targets and structural benchmarks, which could affect future programme implementation.

Given the biannual reviews of the $7bn EFF and the $1.1bn RSF, the two sides will have to agree on past performance and forward-looking implementation plans.

Upon the successful completion of the review, Pakistan will be eligible for the disbursement of about $1bn (760 million Special Drawing Rights) under the EFF and another $200m under the RSF by the end of April.

On the technical side, Pakistan will likely meet almost all seven quantitative performance indicators.

Net international res­erves are likely to remain slightly lower than the $7bn benchmark for September 2025 and below $6bn for December 2025 against the $6.5bn benchmark. The State Bank’s net domestic assets are estimated at around Rs12.5-13.5 trillion versus the ceiling target of Rs14.9-15.1tr for September and December 2025.

Published in Dawn, February 26th, 2026