IMF Approves $1 Billion Loan to Pakistan

IMF Approves $1 Billion Loan to Pakistan Amidst Escalating India-Pakistan Tensions

The International Monetary Fund (IMF) has approved a $1 billion disbursement to Pakistan, part of a broader $7 billion Extended Fund Facility (EFF) initiated in September 2024. This decision follows the completion of the first review of the EFF and the approval of a new $1.4 billion program under the Resilience and Sustainability Facility (RSF), aimed at bolstering Pakistan's climate resilience and economic stability.

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India has expressed strong objections to the IMF's decision, citing concerns over Pakistan's alleged support for cross-border terrorism, particularly in light of the recent Pahalgam attack in Indian-administered Kashmir, which resulted in the deaths of 26 civilians. India's Foreign Secretary Vikram Misri urged the IMF to reconsider its financial support to Pakistan, emphasizing the potential misuse of funds.

IND VS PAK WAR

Despite India's objections, the IMF proceeded with the loan approval, commending Pakistan's policy reforms and efforts towards economic stabilization. Pakistani Prime Minister Shehbaz Sharif dismissed India's concerns, asserting that attempts to derail the IMF program were unsuccessful.

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Concurrently, tensions between India and Pakistan have escalated dramatically. Following the Pahalgam attack, India launched "Operation Sindoor," targeting alleged terrorist infrastructure in Pakistan, including locations in Bahawalpur and Muzaffarabad. These strikes reportedly resulted in significant casualties, including the death of Abdul Rauf Azhar, a senior Jaish-e-Mohammed leader linked to past terrorist activities.

In retaliation, Pakistan initiated "Operation Bunyan Marsoos," launching missile strikes against Indian military targets. Both nations have reported casualties and damages, with over 80 deaths reported in the past three weeks. The situation has prompted international concern, with calls for de-escalation from the United States, the European Union, and other global actors.

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Amidst these developments, both India and Pakistan have signaled a potential willingness to de-escalate. Indian officials have expressed readiness for non-escalation if Pakistan reciprocates, while Pakistani Foreign Minister Ishaq Dar stated that Islamabad would consider de-escalation if India halted its actions.

The IMF's loan approval to Pakistan, despite India's objections, underscores the complex interplay between economic assistance and geopolitical tensions in the region. As both nations navigate this precarious situation, the international community continues to advocate for dialogue and restraint to prevent further escalation.

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