The government, in coordination with the State Bank of Pakistan, informed the IMF that it stands ready to adjust policy rates in response to volatility in global food and fuel prices and their impact on domestic inflation.
Officials said that while flood-related risks had eased—allowing a 50 basis points rate cut in December 2025—the central bank’s Monetary Policy Committee kept rates unchanged in March 2026 due to escalating regional tensions.
Islamabad also committed to maintaining exchange rate flexibility as a key shock absorber, particularly against external pressures stemming from the Middle East crisis. Authorities assured that balance of payments stability would be preserved to support imports and external payments.
To strengthen transparency, Pakistan plans to publish semi-annual foreign exchange reserve targets and improve communication around monetary policy decisions. The central bank is also preparing a roadmap to gradually remove foreign exchange restrictions, with a structured reform plan extending to March 2027.
In addition, the government pledged to address rising costs associated with remittance flows through banks and exchange companies. A comprehensive assessment and action plan to reduce these inefficiencies is expected by the end of May 2026.
Authorities further assured that spending would remain within budgetary limits and that subsidy-related claims, including those tied to remittance schemes, would not exceed allocated resources.
The commitments reflect Pakistan’s effort to stabilise its economy, manage inflationary pressures, and maintain investor confidence amid ongoing global and regional uncertainty.
