Setting aside India’s objections to the International Monetary Fund bailout package to Pakistan, the IMF has put up a stout defence of its loan programme to the country, saying Islamabad "met all the required targets" to receive the latest tranche, reported 24NewsHD TV channel on Friday.
India had asked the IMF to reconsider the bailout package as Pakistan allows terrorists to use its soil for launching attacks against Indian citizens.
The global lender disbursed $2.1 billion to Pakistan in two tranches under its Extended Fund Facility (EFF) programme. The IMF and Pakistan last year signed a deal for $7 billion under the EFF.
Defending its loan, IMF's director of the communications department, Julie Kozack, said on Thursday, "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."
Kozack also made a short statement with regards to the conflict between India and Pakistan and hoped for a peaceful resolution between the two countries. "With respect to Pakistan and the conflict with India, I want to start here by first expressing our regrets and sympathies for the loss of life and for the human toll from the recent conflict. We do hope for a peaceful resolution of the conflict," she said.
She said the IMF Executive Board had approved Pakistan's EFF programme in September of 2024. And the first review at that time was planned for the first quarter of 2025. “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.”
She said it was part of a standard procedure under programmes that the IMF Executive Board conducts periodic reviews of lending programmes to assess their progress. “And they particularly look at whether the programme is on track, whether the conditions under the programme have been met, and whether any policy changes are needed to bring the programme 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.
Kozack said that there was a sufficient consensus at the Board to allow the IMF to move forward or for the Board to decide to move forward and complete Pakistan's review. She, however, added that any deviation from the established programme conditions would impact future reviews for Pakistan.
She emphasized that IMF financing addresses balance of payments issues only, with disbursements going directly to the central bank reserves —none for government budget. The first review, completed May 9, triggered the release. “There is a zero limit on central bank lending to the government,” she added, highlighting ongoing structural reforms to improve fiscal management. The IMF Board was “satisfied” with Pakistan’s progress, she said.
The International Monetary Fund (IMF) has firmly dismissed concerns based by Indian media that its recent disbursement to Pakistan under the Extended Fund Facility (EFF) could be used for military operations against India.
“IMF financing is provided to resolve balance of payments issues and is not intended for military use,” Kozack said, adding the program includes stringent safeguards to ensure compliance.
These safeguards include prohibiting central bank lending to the government, targets for reserve accumulation, and comprehensive structural reform conditions to improve fiscal management. Any deviation from these benchmarks, she warned, could jeopardize future disbursements.
Reporter Waqas Azeem