The International Monetary Fund (IMF) has rejected India’s demand to stop giving loans to Pakistan and has confirmed that the Executive Board meeting regarding Pakistan will take place on May 9 as scheduled.
India had asked the IMF to review loans provided to Pakistan following rising tensions between the two countries over the Pahalgam attack that occurred on April 22.
India had expressed reservations to the IMF regarding Pakistan’s $7 billion bailout package from the previous year and the $1.3 billion climate resilience loan that was authorised in March. Although it did not make its reservations public, the Indian government had asked the Fund to examine those payments.
The meeting on May 9 is set to dive into the first review of the Extended Fund Facility (EFF) and discuss the request for the Resilience and Sustainability Facility (RSF). Additionally, they’ll be looking at a new agreement related to Pakistan’s climate change initiative, which is valued at $1.3 billion. This comes on the heels of a deal signed last month for another $1.3 billion as part of the ongoing $7 billion bailout package.
With the IMF’s Executive Board giving the green light, Pakistan will be able to tap into an extra $1 billion, which will raise the total disbursed under the current bailout program to $2 billion.
People are really interested in the conditions that come with this—like potential tax changes, hikes in energy prices, or cuts to subsidies. There’s also a growing curiosity about how this decision might affect inflation, the stability of the rupee, and our foreign exchange reserves.
With economic pressures mounting, the public is eager to find out if these funds will provide any quick relief for fuel or utility costs. Additionally, there’s a shift in focus towards whether Pakistan has a solid long-term strategy to break free from relying on the IMF. Political reactions, particularly in light of regional tensions, will also influence public opinion after the board’s decision on May 9.
Tensions between Pakistan and India after Pahalgam attack
India and Pakistan are on the edge of war since the ‘Pahalgam false flag operation’. India has blamed Pakistan for the attack without providing any evidence. The Pakistan government has stated that they are expecting a strike from India. The Pakistani military and political leadership has made it clear that Pakistan will not carry out any preemptive strike; however, if India strikes, Pakistan will strike back with full capacity. The United States (US) and other countries have urged both Pakistan and India to resolve tensions through talks, as a war between two nuclear countries could have devastating consequences.
