IMF Dismisses Indian Media Claims Over Pakistan Aid Usage
The International Monetary Fund (IMF) has categorically rejected claims by Indian media suggesting that its recent disbursement to Pakistan under the Extended Fund Facility (EFF) could be diverted for military activities against India.
During a press briefing, IMF Communications Director Julie Kozack clarified that the funds released under the EFF are strictly allocated to Pakistan’s central bank reserves and cannot be used for government or military purposes. “IMF financing is provided solely to address balance of payments issues and is not intended for military use,” she said, emphasizing the presence of robust safeguards within the program.
These safeguards include a prohibition on central bank lending to the government, strict reserve accumulation targets, and structural reform benchmarks focused on fiscal discipline. Any failure to meet these conditions, Kozack added, could halt further disbursements.
India had raised concerns over Pakistan potentially using IMF support to fund reconstruction in areas linked to alleged cross-border terrorism. However, the IMF dismissed this narrative, asserting that the program’s design and constraints prevent such misuse.
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Kozack also expressed regret over the human toll of recent tensions between Pakistan and India and urged a peaceful resolution to the situation.
Providing context on the financial program, Kozack noted that the IMF’s current agreement with Pakistan was approved by its Executive Board in September 2024. The first review was agreed upon at the staff level in March 2025 and formally approved on May 9, triggering the latest fund release. While vote counts from the Board remain confidential, Kozack confirmed that there was sufficient consensus for approval.
When questioned about the recent exit of India’s Executive Director at the IMF, K.V. Subramanian, she clarified that such appointments fall under the purview of member countries and not the IMF itself.
