“Pakistan Cannot Use This Money For”…. IMF Clarifies on Safegaurds Placed for Loan

India warns IMF of misuse as military escalation coincides with aid disbursement; IMF clarifies safeguards in place.

May 24, 2025 | In the wake of the Pahalgam terror attack and Pakistan’s subsequent military escalation, India has questioned the International Monetary Fund’s (IMF) recent financial support to Pakistan. The IMF, however, has clarified that the $2.3 billion disbursed in two tranches as part of a $7 billion Extended Fund Facility (EFF) package cannot be used for military or non-programme expenditures.

Also Read: India Lost 20,000 Citizens to Pak Terror, Violated Spirit of Indus Waters Treaty-P Harish at UN

IMF’s Clarification:

“IMF financing is to resolve balance of payments issues, not for unauthorised government disbursement or lending,” said Julie Kozack, IMF Communications Chief.
“Periodic reviews ensure that disbursements remain aligned with reforms and structural targets.”

She emphasised that Pakistan had met all targets under the programme, allowing the Board to approve the disbursements.

Also Read: We Will Choke Your Breath”: Pakistan Army Spokesman Echoes Hafiz Saeed in Threat Over Indus Waters

India’s Concern:

Indian officials, including Finance Minister Nirmala Sitharaman, reportedly flagged concerns to IMF Managing Director Kristalina Georgieva, urging that financial aid to Pakistan could indirectly fund terror infrastructure.

India shared data with the IMF indicating a 20% increase in Pakistan’s arms imports during years of IMF disbursements (1980–2023), suggesting a potential link between aid inflows and military spending.

Also Read: ‘Pakistan Breeds Terrorism’: Indian Diplomat’s Blistering WHO Rebuttal Goes Viral

Backdrop:

• IMF Board approved EFF in September 2024.
• First review held in March 2025, a month before the Pahalgam attack.
• IMF disbursement of $2.3 billion made on May 9, 2025.
• India says this coincided with drone and missile attacks by Pakistan on Indian territory.

What’s Next:

India plans to:
✔️ Approach the World Bank over reports of a $20 billion loan for Pakistan.
✔️ Engage with the Financial Action Task Force (FATF) to push for Pakistan’s re-entry onto its grey list.
✔️ Highlight misuse concerns at global financial forums.

Rajnath Singh’s Warning:

“Aid to Pakistan is indirect funding to terrorism,” said the Defence Minister, referencing intelligence that linked IMF disbursements to increased procurement of arms by Pakistan.

Pakistan’s Position:

Pakistan has not officially responded to India’s latest assertions, while continuing to deny any diversion of IMF funds for military use.

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Tags:

IMF Pakistan Bailout, India IMF Objection, Pakistan Arms Imports, Pahalgam Attack, Operation Sindoor, Indus Waters Treaty, Global Terror Funding, FATF Grey List, OperationSindoor,