WASHINGTON – The International Monetary Fund (IMF) has defended its recent $1.4 billion disbursement to Pakistan, rejecting Indian objections and confirming that Islamabad met all necessary conditions.
Speaking at a press briefing on Thursday, IMF spokesperson Julie Kozack said Pakistan had achieved all performance targets under the Extended Fund Facility (EFF). She clarified that the funds would only support balance of payments and not military or budget spending.
Pakistan Meets IMF Targets
On May 9, the IMF Executive Board approved a fresh $1.4 billion loan to Pakistan under its climate resilience program. The Board also cleared the first review of a broader $7 billion financial package. This approval unlocked nearly $1 billion in immediate funding.
Kozack stated, “The Board approved the disbursement after confirming Pakistan’s compliance with all performance goals and structural reforms.”
She stressed that IMF funds are deposited into Pakistan’s central bank. “They cannot be used for budget financing or military activity,” she said.
Strict Oversight Measures in Place
The IMF highlighted its strong safeguards. These include a zero borrowing limit from the central bank to the government and improvements in public finance management.
“There are strict safeguards in place,” said Kozack, adding that the program promotes transparency and sound economic governance.
India’s Objections Dismissed
India had raised objections to the IMF’s support for Pakistan, especially after an April attack in Indian Illegally Occupied Jammu and Kashmir (IIOJK) that left 26 people dead. The incident triggered heightened tension between the two nuclear-armed neighbors.
Read: Fitna-al-Hindustan Behind Khuzdar School Bus Attack: DG ISPR
India also requested a broader review of IMF loans to Pakistan and sought to influence internal Fund appointments.
However, when asked about India’s stance and the removal of its executive director, Kozack declined to respond. “Appointments are the decision of each IMF member state,” she stated.
IMF Stands by Pakistan
In its statement following the approval, the IMF praised Pakistan’s efforts. “Pakistan’s policy actions have delivered progress in economic stabilisation and confidence-building,” the Fund noted.
The May 9 review brought total disbursements under the EFF to $2 billion. The remaining amount will be released in tranches after further reviews. No money from the climate resilience loan was disbursed immediately.
India Eyes FATF and World Bank Action
On Friday, a senior Indian official said New Delhi would lobby the Financial Action Task Force (FATF) to place Pakistan back on its grey list. India also intends to oppose future World Bank funding for Islamabad.
These statements reflect growing political and diplomatic pressure from India amid rising regional tensions.
IMF Calls for Peace
Kozack closed the briefing with a message of peace. She offered condolences to those affected by recent violence between the two countries. “We hope for a peaceful resolution,” she said.
The IMF continues to support Pakistan’s economic recovery, despite geopolitical friction.
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