In spite of India's vehement protest, the International Monetary Fund (IMF) has certified that Pakistan met all the requirements required to receive its latest instalment of bailout program loan.
The IMF recently cleared a $1 billion (about ₹8,000 crore) financial package for Pakistan, even as New Delhi expressed serious objections to the move.
The assistance was approved soon after India conducted Operation Sindoor, a military strike against terror groups in Pakistan and Pakistan-Occupied Kashmir (PoK). India had requested the IMF to revisit the funding, blaming Islamabad for offering havens to terrorists and sponsoring cross-border raids on Indian territory.
Defence Minister Rajnath Singh recently panned the financial support, terming it an "indirect funding of terrorism" and cautioning international financial institutions, including the IMF, on the consequences of such assistance.
Pakistan so far has received $2.1 billion in two tranches under the Extended Fund Facility (EFF). The IMF and Pakistan had initially signed a $7 billion deal last year under this facility.
Justifying the spending, Julie Kozack, IMF Communications Department Director, said on Thursday, "Our Board concluded that Pakistan had actually achieved all of the targets. It had made progress on some of the reforms, and for that reason, the Board did proceed and approve the programme."
Touching on the conflict between India and Pakistan briefly, Kozack hoped for peace and condoled the fatalities arising from the conflict. "With regard to Pakistan and the conflict with India, I would like to begin here by first articulating our regrets and sympathies for the loss of life and for the human cost of the recent conflict. We hope indeed for a peaceful resolution of the conflict," she stated.
Kozack explained further that the IMF Executive Board had originally endorsed Pakistan's EFF program in September 2024. The first formal review was set for the first quarter of 2025. "As that timeline suggests, on March 25th of 2025, the IMF Staff and the Pakistani authorities agreed on a Staff-Level Agreement for the First Review of the EFF.". That agreement, that Staff-Level Agreement, was then presented to our Executive Board, and our Executive Board completed the review on May 9th. As a result of the completion of that review, Pakistan received the disbursement at that time,” she explained.
She clarified that such reviews are standard under IMF programs, serving to evaluate whether objectives are being met, and to recommend any necessary policy adjustments. "And they specifically look at whether the program is on track, whether conditions under the program have been satisfied, and whether policy adjustments are necessary to put the program back on track. And in the situation of Pakistan, our Board determined that Pakistan had actually achieved all of the targets.". It had made advancements in some of the reforms, and as a result, the Board proceeded and approved the program," Kozack reaffirmed.
She said that there was sufficient support from Board members to proceed with the next phase of the program for Pakistan.
But Kozack warned that any departure from the agreed terms of the program would have implications for future reviews.
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