The International Monetary Fund on Friday (May 9, 2025) approved the immediate disbursement of about $1 billion to Pakistan under the ongoing Extended Fund Facility. India's opposition to IMF comes at a time when military conflict between India and Pakistan.
Source Credit : Press Trust of India
On Friday the International Monetary Fund (IMF) approved the immediate disbursement of approximately $1 billion to Pakistan as part of the ongoing Extended Fund Facility. In a statement released by the Washington-based global lender, it was announced that the Executive Board had completed the initial review of Pakistan's economic reform program under the Extended Fund Facility (EFF) arrangement.
"This decision allows for an immediate disbursement of around USD 1 billion (SDR 760 million), bringing total disbursements under the arrangement to about USD 2.1 billion (SDR 1.52 billion)," the agency said.
Furthermore, the IMF Executive Board has approved the authorities' request for an arrangement under the Resilience and Sustainability Facility (RSF), granting access to approximately $1.4 billion (SDR 1 billion). In a statement, the IMF announced that Pakistan's 37-month Extended Fund Facility (EFF) was approved on September 25, 2024. The program is designed to enhance resilience and foster sustainable growth, with key priorities focused on solidifying macroeconomic stability.
After the Executive Board discussion, Deputy Managing Director and Chair Nigel Clarke stated that risks to the outlook are still high, especially due to global economic policy uncertainty, increasing geopolitical tensions, and ongoing domestic vulnerabilities.
India has expressed concerns regarding the effectiveness of IMF programs in the case of Pakistan, citing its poor track record. Additionally, there are worries about the potential misuse of debt financing funds for state-sponsored cross-border terrorism.
New Delhi strongly opposed the IMF's proposal to extend fresh loans of $2.3 billion to Pakistan, citing concerns that the funds could potentially be misused to finance state-sponsored cross-border terrorism. India formally registered its protest at the board of the IMF during its meeting on Friday, which was convened to review the EFF lending programme for Pakistan. In a significant move, New Delhi chose to abstain from voting at this crucial IMF meeting.
India's opposition at the IMF comes at a time when military conflict between India and Pakistan has intensified after a terrorist attack in Kashmir's Pahalgam killed 26 people, mostly tourists, on April 22.
"While the concern that fungible inflows from international financial institutions, like the IMF, could be misused for military and state-sponsored cross-border terrorist purposes resonated with several member countries, the IMF's response is circumscribed by procedural and technical formalities. This is a serious gap highlighting the urgent need to ensure that moral values are given appropriate consideration in the procedures followed by global financial institutions," the ministry said.
