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Pakistan Prime Minister Shahbaz Sharif meeting IMF managing director Christalina Georgree in Paris.
A few days after India’s protest, the International Monetary Fund, the IMF, has defended a $ 2.4 billion bailout package to Pakistan. The IMF said that Pakistan has fulfilled all funding conditions due to which the package has been approved.
On 9 May 2025, when the IMF board meeting was being held for the approval of this package, India objected to the loan and did not attend the voting.
India had said- the package should be considered again, because Pakistan can use these money to promote terror. However, IMF did not accept it.
IMF’s $ 2.4 billion Two components included in the package
1. Extended Fund Facility (EFF): The State Bank of Pakistan received an installment of $ 1.023 billion (about 8.76 thousand crores) on 14 May 2025. This reached his foreign exchange reserves to $ 10.3 billion (about 88 thousand crore rupees).
The goal of EFF is to stabilize Pakistan’s economy and increase the store. As of June 2025, a target of $ 13.9 billion (about 120 thousand crore rupees) has been targeted.
The $ 1.023 billion fund released is part of a package of $ 7 billion (about 60 thousand crore Indian rupees) sanctioned in September 2024.
It is to be given at different intervals in 37 months. The first installment of $ 1.1 billion was released immediately after the approval of the package on 26 September 2024.
That is, out of two installments, $ 2.123 billion (about 18 thousand crore rupees) has been released out of the $ 7 billion EFF.
2. Regency and Sustainable Facility (RSF): Under this, May 9 has been approved by $ 1.4 billion. However, it has not yet been disbelled. This package is for works such as improving disaster response and promoting permanent water resources management.
Pakistan’s package has been approved after watching fiscal surplus, foreign exchange reserves level, inflation control and debt management.
Loan released after review
The IMF completed its first review on 9 May 2025 to give a loan. IMF does it on three parameters …
- Economic Performance: Quantitative targets such as fiscal surplus, foreign exchange reserves, inflation and debt management.
- Structural Reforms: Whether or not the policy commitment was complied with. Such as tax reforms, energy sector adjustments and governance reforms.
- Program Objective: Comprehensive economic stability, sustainable development, and progress in the case of RSF in the direction of Clude Regylns.
Review done in three parts:
- Staff-Level Assessment: The IMF staff visited Pakistan to collect data, meet government officials and evaluate the program target.
- Board approval: The IMF Executive Board reviewed the staff’s findings and decided whether the next installment should be approved or not.
- Conditions and Standards: For the qualification of the fund, it is necessary to meet specific terms and ongoing structural benchmarks.
Now answers to some other important questions:
1. What does the Executive Board of IMF do?
IMF is an international institution that helps countries, advises and monitors their economy. The core team of this institution is the Executive Board.
This team sees which country to give loans, which policies have to be implemented and how to work on the economy of the world. It consists of 24 members called Executive Director. Every member represents a country or group of country.
2. IMF voting on the basis of quota in IMF?
IMF has 191 member countries. Everyone has the right to one vote, but the value of the vote is different. This is decided on the basis of the quota received by that country in IMF. That is, the more quota, the more value of the vote. The value of India’s vote is around 2.75%.
How much the quota of a country will be in the IMF is determined by its economic status (such as GDP), foreign exchange reserves, trade and economic stability.
America’s quota is the highest 16.5%, so its vote in IMF is the most powerful as veto. India is 2.75% while Pakistan is 0.43%.
3. How many percent votes are required to take a decision?
The IMF requires 85% of the votes to take any decision. The US has the highest 16.5% voting rights. In such a situation, if America does not vote, then there will be 83.5% of the votes, which is not enough for the majority.