IMF responds to questions on voting on Pakistan's review, Indian claims of alleged misuse of funds

There was sufficient consensus at the International Monetary Fund's (IMF) Executive Board to complete the first loan review of Pakistan's $7 billion Extended Fund Facility, IMF's Director Communications Julie Kozack has said.

"In general, Fund Board decisions are taken by consensus, and in this case, there was a sufficient consensus at the Board to allow us to move forward or for the Board to decide to move forward and complete Pakistan's review," she said.

Kozack was responding to a question by a journalist on the voting on Pakistan's review. The journalist also asked whether the Fund had any assessment on Indian government claims that Pakistan would use the loan disbursements to "rebuild areas that allegedly support cross-border terrorism" and what safeguards it had to ensure its funds are not spent on militaries in general.

Responding to the question, the IMF director pointed out that the disbursements were for resolving balance of payments crises.

Any disbursements made to Pakistan under the EFF are allocated to the State Bank of Pakistan's reserves and cannot be used for budgetary support or loaned to the government, she said. The EFF also includes substantial structural conditionality around improving fiscal management, she added.

Moreover, the Fund approved the first loan review after assessing that Pakistan had met all its targets and made progress on some reforms under the loan program.

The IMF's Executive Board had approved the first loan review amounting to $1 billion and a new climate-financing program under the Resilience and Sustainability Facility amounting to $1.4 billion.

Ahead of the voting by the Executive Board, Indian officials had raised objections, claiming Pakistan was misusing funds — claims that Pakistan has rejected as politically motivated.