IMF Releases $1 Billion to Pakistan Despite India’s Objections

Pakistan’s government announced Friday that the International Monetary Fund’s executive board has completed the first review of its $7 billion assistance package, releasing $1 billion in funding to the nation currently engaged in conflict with India following the April 22 Pahalgam terrorist incident.

“Prime Minister Muhammad Shehbaz Sharif expresses satisfaction over the approval of a $1 billion tranche by the International Monetary Fund (IMF) for Pakistan,” stated a release from the Prime Minister’s Office.

This latest approval increases total disbursements to $2 billion within the $7 billion program. The funding decision comes after New Delhi urged the IMF to reconsider its lending to Pakistan, citing ongoing support for cross-border terrorism against India.

According to Reuters, the staff-level agreement for the financial assistance was finalized between Pakistan and the IMF before tensions escalated between the neighboring countries. When approached by the news agency after the approval, the global financial institution did not provide comment.

India’s position on Pakistan’s bailout:

Prior to the approval, India expressed opposition Friday to the IMF’s proposal to extend $2.3 billion in new loans to Pakistan, arguing these funds could potentially finance state-sponsored cross-border terrorism. The Indian government formally registered its protest during Friday’s IMF board meeting, which reviewed both the Extended Fund Facility (EFF) lending program ($1 billion) and considered a new Resilience and Sustainability Facility (RSF) lending program ($1.3 billion) for Pakistan.

In its statement, the Indian government emphasized that “rewarding continued sponsorship of cross-border terrorism sends a dangerous message to the global community, exposes funding agencies and donors to reputational risks, and makes a mockery of global values.” India raised concerns that fungible financial inflows from international institutions like the IMF could be diverted for military purposes and state-sponsored cross-border terrorist activities.