India has requested the International Monetary Fund (IMF) to review loans disbursed to Pakistan, an Indian government source informed Reuters on Friday, as tensions between the South Asian neighbours escalated following a deadly attack in the Indian Illegally Occupied Jammu and Kashmir (IIOJK).
Following last week’s attack on tourists in IIOJK, which resulted in the deaths of 26 individuals, India and Pakistan have announced a series of measures, raising concerns that the latest crisis between the nuclear-armed rivals could escalate into a military conflict.
Islamabad has denied any involvement in the attack and has called for a neutral investigation. In response, India suspended a crucial river water sharing treaty, and both countries have closed their airspace to each other’s airlines.
Pakistan secured a $7 billion bailout program from the IMF last year and was granted an additional $1.3 billion climate resilience loan in March.
This program is critical for Pakistan’s $350 billion economy, which the country states has stabilized under the bailout, helping it avert a potential default.
An Indian government source told Reuters that India has raised concerns with the IMF regarding its loans to Pakistan and has requested a review, without providing further details.
The IMF and India’s finance ministry have not yet responded to requests for comment.
The adviser to Pakistan’s finance minister stated that the IMF program is “well on track.”
“The latest review has been completed successfully, and we are entirely on schedule,” adviser Khurram Schehzad told Reuters, adding that Pakistan had very productive spring meetings with financial institutions in Washington.
“We held approximately 70 meetings, and there has been significant interest in investing in and supporting Pakistan as its economy recovers,” Schehzad said.
The escalating tensions between the two nations have garnered global attention, leading to calls for de-escalation.
