'Pakistan Not Allowed To...': IMF Explains $2.3 Billion Bailout Payments
The International Monetary Fund explained Friday that Pakistan cannot sanction non-programme use of financial assistance provided to its central bank under the Extended Fund Facility, and that there are safeguards to check misuse, including unauthorised government disbursement or lending.
IMF financing, Comms chief Julie Kozack told reporters Thursday, is expressly for resolving balance of payments problems, and deviation from established programme conditions - which include structural conditions like improving fiscal management - will impact future reviews.
She also pointed to IMF protocol, under which the Executive Board 'conducts periodic reviews of lending programmes... to check if policy changes are needed to bring it back on track'.
"... our Board found 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."
Clarifications on the monitoring of EFF payments come amid red flags raised by India over international agencies choosing to transfer billions in financial assistance to Pakistan at this time, i.e., after the Pahalgam terror attack and subsequent military escalation by the Pak Army.
Sources said Finance Minister Nirmala Sitharaman spoke directly to the IMF Managing Director Kristalina Georgieva and urged her not to approve any financial aid to Pakistan.
Ms Georgieva was told India is not against the providing of financial assistance for any country, but pointed to the timing of these disbursements; the first was made while the Pak Army was firing drones and missiles at military and civilian centres in western India.
Sources told NDTV India had conveyed to the IMF that data from previous years indicated an uptick in Pakistan's arms procurement after receiving aid.
READ | India To Talk To World Bank, Global Watchdog Over Pak's 'Terror Funds'
It was pointed out Pak arms imports increased - by over 20 per cent from 1980 to 2023 - in the years it received IMF disbursements in comparison to years when it did not receive the same.
The IMF has given Pak $2.3 billion in two tranches so far as part of a $7 billion EFF deal.
India had questioned these disbursements; Defence Minister Rajnath Singh last week suggested the aid provided to Pakistan was a "form of indirect funding to terror".
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The IMF, however, has pointed out its Board had approved the EFF in September 2024, and held a first progress review in March 2025, a month before the Pahalgam attack. And, "as a result of completion of that review, Pakistan received the disbursement at that time (i.e., May 9)".
READ | Days After India's Message, IMF Defends Bailout Package To Pakistan
The Indian government, meanwhile, is also expected to reach out to the World Bank over reports a 10-year, $20 billion is to be fast-tracked. Source said the government will also speak to the Financial Action Task Force, an anti-terror funding watchdog to put Pak back on its 'grey list'.
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