IMF on Pakistan bailout package.

NEW DELHI: Despite India’s objections to the bailout package, the International Monetary Fund (IMF) on Thursday backed Pakistan, saying that it fulfilled all necessary requirements to receive its latest loan instalment.The IMF approved a $ 1 billion (over Rs 8,000 crore) assistance to Pakistan, whilst India voiced its concerns. This financial support coincided with Pakistan’s response to India’s Operation Sindoor, which targeted terror facilities in Pakistan and Pakistan-occupied Kashmir (PoK).India requested the IMF to reassess the bailout, citing Pakistan’s allowance of its territory for state-sponsored terrorist activities against Indian citizens. Defence minister Rajnath Singh recently described the aid as ‘indirect funding to terror’ and warned international organisations, including the IMF.

Also Read: All trade routes closed for Pakistan, India scrutinising imports from UAE, Iran & other Gulf countries to spot Pakistani goodsThe IMF has provided Pakistan with $2.1 billion in two instalments under its Extended Fund Facility (EFF) programme, part of a $7 billion agreement signed last year.IMF’s communications director Julie Kozack stated, “Our Board found that Pakistan had indeed met all of the targets. It had made progress on some of the reforms, and for that reason, the Board went ahead and approved the programme.”Detailing the timeline, Kozack said, “And consistent with that timeline, on March 25th of 2025, the IMF Staff and the Pakistani authorities reached a Staff-Level Agreement on the First Review for 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.““What I want to emphasize here is that it is part of a standard procedure under programs that our Executive Board conducts periodic reviews of lending programs to assess their progress. And they particularly look at whether the program is on track, whether the conditions under the program have been met, and whether any policy changes are needed to bring the program back on track. And in the case of Pakistan, our Board found that Pakistan had indeed met all of the targets.It had made progress on some of the reforms, and for that reason, the Board went ahead and approved the program,” she said.Addressing the India-Pakistan situation, Kozack expressed condolences for casualties and advocated peaceful resolution.Also Read: How India’s punitive measures will continue to hit Pakistan’s fragile economy – explainedWhat safeguards does the IMF have that its funds in Pakistan won’t be used for military actions?Kozack insisted that IMF financing is provided to members for the purpose of resolving balance of payments problems. “In the case of Pakistan, and this is my second point, the EFF disbursements, all of the disbursements received under the EFF, are allocated to the reserves of the central bank. So, those disbursements are at the central bank, and under the program, those resources are not part of budget financing. They are not transferred to the government to support the budget.““And the third point is that the program provides additional safeguards through our conditionality. And these include, for example, targets on the accumulation of international reserves. It includes a zero target, meaning no lending from the central bank to the government. And the program also includes substantial structural conditionality around improving fiscal management. And these conditions are all available in the program documents if you wanted to do a deeper dive.And, of course, any deviation from the established program conditions would impact future reviews under the Pakistan program,” added Kozack.