IMF Says Safeguards Prevent Misuse of Funds by Pakistan

The International Monetary Fund (IMF) has clarified that Pakistan cannot divert IMF funds for non-programme purposes, including unauthorised government spending or lending. The statement comes amid international scrutiny following the recent disbursal of a $1 billion tranche under the Extended Fund Facility (EFF), which India has publicly opposed.

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IMF Communications Director Julie Kozack reiterated on Thursday that IMF financing is strictly intended to address balance of payments challenges, and that safeguards are in place to ensure the funds are used only within the scope of approved programme objectives.

“There are strict protocols and regular performance reviews to prevent misuse of funds,” Kozack said. She explained that deviations from agreed programme conditions—such as structural reforms and improved fiscal discipline—could lead to a halt or revision of future disbursements.

Kozack emphasized the IMF’s oversight framework, stating, “The Executive Board conducts periodic reviews of lending programmes to assess whether conditions are being met and whether any policy changes are needed to bring the programme back on track.”

She reiterated that in Pakistan’s case, the IMF Board found the country had met all its targets and made progress on key reforms, which is why the recent disbursement was approved.

The clarification follows India’s objections linking IMF assistance to Pakistan’s alleged role in sponsoring cross-border terrorism. While the IMF has not commented directly on geopolitical concerns, it has firmly maintained that its programmes are economically driven and subject to rigorous technical assessments.