The International Monetary Fund (IMF) on Friday said that its executive board approved funding for Pakistan after the country \u201cmet all the targets\u201d under the Extended Fund Facility (EFF) programme, adding that the loan programme for Islamabad was only for stabilisation of foreign exchange reserves and not related to the budget financing.<\/p>\n\n\n\n
Despite Indian attempts<\/a> to derail Pakistan\u2019s loan programme, the IMF approved the immediate disbursement<\/a> of about $1 billion to Pakistan under the ongoing EFF and allowed an additional arrangement for the $1.4bn Resilience and Sustainability Facility (RSF).<\/p>\n\n\n\n During a press briefing<\/a> in Washington D.C., IMF Director of the Communications Department, Julie Kozack, said, \u201cOur 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.\u201d<\/p>\n\n\n\n An Indian journalist asked the spokesperson on the recent bailout package by IMF to Pakistan, saying \u201cthe Indian government has expressed a lot of displeasure with Pakistan planning to use this package to build\u2014rebuild\u2014areas that allegedly support cross-border terrorism.\u201d She also asked a question related to the \u201cmajority vote that was received in approving this bailout package for Pakistan on May 9.\u201d<\/p>\n\n\n\n Another journalist asked about the implications of the escalation between Pakistan and India on both economies, while another questioned what \u201csafeguards the IMF has that its funds won\u2019t be used for military or in support of military actions.\u201d The journalist also asked about the controversy about the termination of India\u2019s IMF Executive Director, KV Subramanian.<\/p>\n\n\n\n In response to the questions, Kozack said the IMF\u2019s Executive Board approved Pakistan\u2019s EFF programme in September of 2024.<\/p>\n\n\n\n \u201cThe first review at that time was planned for the first quarter of 2025. And 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,\u201d she said.<\/p>\n\n\n\n She added that the agreement was then presented to the Fund\u2019s Executive Board, which completed the review on May 9. \u201cAs a result of the completion of that review, Pakistan received the disbursement at that time,\u201d she said.<\/p>\n\n\n\n Kozack explained that the global money-lender had a standard procedure in place under its programmes which allowed its executive board to conduct periodic reviews of lending programs to assess countries\u2019 progress. The board, she said, particularly looked at whether the programme was on track, whether the conditions under the programme were met, and whether any policy changes were needed to bring the programme back on track.<\/p>\n\n\n\n She then said that Pakistan\u2019s programme was approved after the country successfully met all of the required targets.<\/p>\n\n\n\n Regarding the question on safeguards, she clarified that IMF financing was provided to members for the purpose of resolving balance of payments problems, therefore, in the case of Pakistan, all the disbursements received under the EFF were allocated to the reserves of the central bank.<\/p>\n\n\n\n \u201cSo, those disbursements are at the central bank, and under the programme, those resources are not part of budget financing. They are not transferred to the government to support the budget,\u201d she said.<\/p>\n\n\n\n The IMF spokesperson added the programme provides additional safeguards through conditionality that includes targets on the accumulation of international reserves.<\/p>\n\n\n\n \u201cIt includes a zero target, meaning no lending from the central bank to the government. And the programme also includes substantial structural conditionality around improving fiscal management,\u201d she said, adding that any deviation from the established programme conditions would impact future reviews.<\/p>\n\n\n\n Kozack said that the appointment and resignation of an executive board member was the prerogative of any country, and it was completely up to the country\u2019s authorities to determine who represented them at the Fund.<\/p>\n\n\n\n On the Pakistan-India tension, Kozack expressed regrets and sympathies for the loss of life and hoped for a peaceful resolution of the conflict.<\/p>\n\n\n\n Earlier this month, the IMF had approved<\/a> two major financing arrangements for the country \u2014 a $1 billion disbursement under the EFF and a new RSF aimed at supporting climate-related initiatives.<\/p>\n\n\n\n In a statement, the IMF said its Executive Board completed the first review of Pakistan\u2019s economic reform programme supported by the EFF Arrangement.<\/p>\n\n\n\n \u201cThis decision allows for an immediate disbursement of around $1bn (SDR or special drawing rights 760 million), bringing total disbursements under the arrangement to about $2.1bn (SDR 1.52bn). In addition, the IMF Executive Board approved the authorities\u2019 request for an arrangement under the RSF, with access of about $1.4bn (SDR 1bn),\u201d it said.<\/p>\n\n\n\n It noted that Pakistan\u2019s policy efforts under the EFF had already delivered \u201csignificant progress\u201d in stabilising the economy and rebuilding confidence, amidst a challenging global environment.<\/p>\n\n\n\n \u201cFiscal performance has been strong, with a primary surplus of two per cent of gross domestic product achieved in the first half of FY25, keeping Pakistan on track to meet the end-FY25 target of 2.1pc of GDP. Inflation fell to a historic low of 0.3pc in April, and progress on disinflation and steadier domestic and external conditions, have allowed the State Bank of Pakistan to cut the policy rate by a total of 1100 bps since June 2025. Gross reserves stood at $10.3bn at end-April, up from $9.4bn in August 2024, and are projected to reach $13.9bn by end-June 2025 and continue to be rebuilt over the medium term.\u201d<\/p>\n\n\n\n Meanwhile, it said the RSF would support the authorities\u2019 efforts to reduce vulnerability to natural disasters and build economic and climate resilience.<\/p>\n\n\n\n In a separate development on Friday, President Asif Ali Zardari held a meeting with a delegation of the International Monetary Fund (IMF), led by the Director of the Middle East and Central Asia Department Jihad Azour, highlighting the Fund\u2019s positive role in promoting economic development in developing nations.<\/p>\n\n\n\n Discussing Pakistan\u2019s current economic situation and the ongoing IMF programme, the president acknowledged and appreciated the IMF\u2019s contribution to Pakistan\u2019s economic progress, according to the state-run Associated Press of Pakistan (APP)<\/a><\/em>.<\/p>\n\n\n\n The delegation members expressed satisfaction over Pakistan\u2019s efforts for economic reforms and implementation of the IMF programme, which they observed was progressing in the right direction.<\/p>\n\n\n\n \u201cThe delegation further emphasised that the programme assisted in reducing inflation and fiscal deficit and strengthening Pakistan\u2019s foreign exchange reserves,\u201d per the report.<\/p>\n\n\n\n President Zardari thanked the IMF for its continued support and cooperation with Pakistan and also appreciated the finance ministry for its efforts to improve the national economy, it added.<\/p>\n\n\n\n<\/a>President lauds IMF programme\u2019s role in Pakistan\u2019s economic stability<\/h2>\n\n\n\n