Pakistan has received the second tranche of $1.02 billion from the International Monetary Fund (IMF) under the Extended Fund Facility (EFF)—a long-term loan program designed to stabilize struggling economies. This marks a major step in Pakistan’s $7 billion IMF loan agreement, which began in September 2024 and spans 37 months.
The update was officially shared by Pakistan’s central bank, the State Bank of Pakistan (SBP), which posted on X (formerly Twitter):
“SBP has received the second tranche of SDR 760 million (US$ 1,023 million) from the IMF under the EFF program. The amount will be reflected in SBP’s foreign exchange reserves for the week ending on 16th May 2025.”
This brings Pakistan’s total receipts under the EFF to approximately $2.1 billion.
Also Approved: $1.4 Billion in Climate & Disaster Aid
In the same meeting held on May 9, the IMF also approved an additional $1.4 billion for Pakistan under the Resilience and Sustainability Facility (RSF). This special aid is meant to support countries tackling climate change challenges and enhancing disaster preparedness—a growing concern for Pakistan following repeated floods and climate-induced crises.
IMF Says Programme Is “On Track”
Quoting Pakistan officials, Reuters reported that the IMF sanctioned $1 billion in cash following the first review of Pakistan’s $7 billion programme. After this review, Pakistan is eligible to receive up to $2 billion in total.
The IMF also shared an official update on X (formerly Twitter), stating:
“IMF Board approved the first review of Pakistan’s economic reform program under the EFF, enabling a disbursement of ~ $1 billion, reflecting strong programme implementation which has contributed to continuing economic recovery.”
India Abstains, Citing Misuse Concerns
India, however, expressed strong objections during the IMF board vote. Although the IMF’s rules don’t allow a formal “no” vote, India abstained from voting and issued an official statement questioning the credibility of Pakistan’s financial track record.
In its statement, India raised two key concerns:
- Repeated misuse of past IMF bailouts, without long-term reform.
- The risk of IMF funds being diverted, potentially for state-sponsored cross-border terrorism, particularly against India.
India also emphasized that while Pakistan now has a civilian government, its military remains heavily involved in policymaking and the economy, making sustainable reforms difficult.
While Pakistan sees this payout as a vital economic lifeline, India’s objections reflect a wider international concern: Are IMF funds driving reform, or simply prolonging dependency?
With geopolitical tensions still simmering and mutual trust in short supply, Pakistan’s IMF deal continues to be a source of both relief and contention in South Asia’s diplomatic landscape.
