An Indian journalist faced an awkward moment during an IMF press briefing when he asked if Pakistan could use IMF funds to support cross-border terrorism. Julie Kozack, Director of Communications at the IMF, firmly denied the suggestion. She clarified that the loan is strictly for supporting Pakistan’s foreign exchange reserves and not for any military or political purpose.
Kozack explained that Pakistan cannot use the IMF funds for its national budget or any government spending. She said the money is given directly to the State Bank of Pakistan to help with balance of payments. Moreover, she stated that the Government of Pakistan is not allowed to borrow from the central bank under the loan terms. She confirmed Pakistan’s borrowing from the State Bank is currently zero.
She further noted that Pakistan had met all the conditions required under the current loan program. According to her, the decision to release the latest installment on May 9 was based on Pakistan’s strong performance. She added that the IMF Executive Board approved the installment with full agreement, and the voting process is always kept secret.
The IMF official stressed that the loan is only meant to help Pakistan handle its foreign payments, not to fund its budget. She repeated that the funds do not go to the government directly and are managed strictly under the program’s rules. Kozack also said that IMF had no issues working with Pakistan due to its steady economic reforms.
Responding to another question, Kozack addressed the resignation of an Indian member of the IMF Executive Board. She said it would not affect the board’s work. Meanwhile, talks between Pakistan and the IMF continue, focusing on improving public sector companies. The IMF has asked for details on losses faced by these state-run firms.