IMF Loan to Pakistan: Was USD1 billion loan tied to ceasefire clause?
New Delhi: How did India and Pakistan’s military actions against each other suddenly reach a ceasefire agreement? The decision came suddenly on Saturday night, surprising the world, including people of both countries. It is evident that cash-strapped Pakistan sued for ceasefire and peace after facing three days of extensive attacks from India. But the answer is not that simple. There should be another factor, such as a hefty loan of USD 1 billion that the neighbouring country needed in the current situation. It is just a theory that the USD 1 billion immediate loan approved by the International Monetary Fund (IMF) to Pakistan might come with a condition to – announce an immediate ceasefire with India.
The United States reportedly pressured Pakistan to quickly de-escalate tensions, conditioning a $1 billion IMF loan on Pakistan’s immediate agreement to a ceasefire.
Notably, the ceasefire was agreed bilaterally between both the countries. However, the United States is also taking credit for the immediate de-escalation.
As per a report by India Today TV, citing sources, America reportedly pressured Islamabad to quickly de-escalate tensions, conditioning USD1 billion IMF loan on Pak’s immediate agreement to a ceasefire.
India expressed its disapproval and protested against the IMF’s decision. The Washington-based global lender also came in for a lot of hear for its decision to allow USD 1billion immediate loan when Pakistan was targeting Indian civilians and military bases for India’s attack on terror camps. Pakistan’s timing of attacks against India was considered self-destructive, coinciding with an IMF board review of Pakistan’s financial assistance program.
It is worth noting that any loan by the IMF cannot be issued without the approval from Washington DC and it is the White House that signs the final papers.
President Trump claimed that he personally secured a ceasefire after extensive overnight negotiations. His claim was supported by Vice President Vance and Secretary of State Rubio.
Senator Rubio engaged in diplomatic conversations with high-ranking officials from India and Pakistan. These discussions included calls with India’s Foreign Minister S Jaishankar, Pakistan’s Prime Minister Shehbaz Sharif, and Pakistan’s Chief of Army Staff General Asim Munir.
On a contrary, New Delhi stated that both the countries bilaterally agreed to ceasefire following Pakistan’s Director General of Military Operations (DGMO) called to discuss a pause for the firing.
However, the US did play a key role in the de-escalation between the two countries by placing direct pressure on Pakistan, linking the $1-billion IMF loan to immediate acceptance of the ceasefire, according to sources.
However, it might be possible that the US pressured Islamabad to initiate the ceasefire with India for USD 1 billion IMF loan.
IMF Loan Vital To Pakistan’s Economic Stability
- Pakistan’s USD 7 billion IMF bailout program was under review on May 9th. The country’s continued reliance on loans was a key factor in this assessment.
- On Friday, during the crucial IMF board meet, Pak’s financial facilities were reviewed to decide on further funding.
- As of March 31, 2025, Pakistan’s outstanding loans totaled $6.2 billion, based on IMF data.
- The World Bank, also issued more than USD48 billion in assistance.
- Pakistan’s foreign debt totaled USD130 billion in 2024.
- Pakistan’s precarious financial situation has necessitated reliance on financial assistance from international organizations and nations such as China, Saudi Arabia, and Qatar.
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