The International Monetary Fund (IMF) has reached a staff-level agreement with Pakistan to unlock $1.2 billion in funding, contingent on IMF board approval. This agreement includes $1 billion under the Extended Fund Facility (EFF) and $210 million under the Resilience and Sustainability Facility (RSF), bringing total disbursements to $4.5 billion under the ongoing $7 billion program. The IMF is urging Pakistani policymakers to maintain tight, data-dependent monetary policy to control inflation and bolster external buffers, especially given rising global energy prices and regional tensions. The IMF mission chief, Iva Petrova, noted that the Middle East conflict poses risks to Pakistan's economic outlook through volatile energy prices and tighter financial conditions, suggesting exchange rate flexibility as a key shock absorber.