New Delhi, In a recent review of the International Monetary Fund’s (IMF) ₹3 billion loan to Pakistan, India has taken a firm stance, emphasizing the need for “stringent monitoring” to ensure that emergency funds are not diverted towards defense expenses or repaying loans to other nations.
India’s representative, executive director Krishnamurthy Subramanian, conveyed this position to the IMF’s executive board during the assessment of the $3 billion Stand-By Arrangement (SBA) granted to Pakistan in July. Despite abstaining from voting, India urged the implementation of “checks and balances” to monitor Pakistan’s use of IMF funds, emphasizing the importance of directing resources towards developmental needs.
The development gains significance as Pakistan’s new Prime Minister, Shehbaz Sharif, seeks additional funding support from the IMF, including the $1.2 billion remaining balance under the SBA expiring next month. The IMF’s previous support aided Pakistan in avoiding an external payments crisis last June, and ongoing discussions aim to address the nation’s economic challenges post-general elections.
Moody’s Investors Service notes that Pakistan’s external financing needs are expected to remain high until at least 2026-27, prompting a call for a longer-term financing plan post the current IMF arrangement concluding in April 2024.
