Agreed EFF conditions: Any deviation could affect future reviews

ISLAMABAD: Any deviation from the established programme conditions would impact future reviews under the Pakistan Extended Fund Facility (EFF) programme.

This was stated by Julie Kozack, director Communications Department IMF during a press briefing.

Replying to a question with respect to the safeguards, she stated that there are three points. The first is that IMF financing is provided to members for the purpose of resolving balance of payments problems.

IMF sets 11 new structural benchmarks for Pakistan under $7bn EFF

She stated in the case of Pakistan, and this is the second point, the EFF disbursements, all of the disbursements received under the EFF, are allocated to the reserves of the central bank. So, those disbursements are at the central bank, and under the program, those resources are not part of budget financing. They are not transferred to the government to support the budget.

Elaborating the third point, IMF official said is that the programme provides additional safeguards through conditionality. And these include, for example, targets on the accumulation of international reserves. It includes a zero target, meaning no lending from the central bank to the government.

And the programme also includes substantial structural conditionality around improving fiscal management. And these conditions are all available in the programme documents if you wanted to do a deeper dive. And, of course, any deviation from the established programme conditions would impact future reviews under the Pakistan programme.

With respect to the Indian executive director who had been at the Fund, she stated all she can say on this is that the appointment of executive directors is a matter for the member country. It is not a matter for the Fund, and it is completely up to the country’s authorities to determine who represents them at the Fund.

With respect to Pakistan and the conflict with India, she expressed regrets and sympathies for the loss of life and for the human toll from the recent conflict. “We do hope for a peaceful resolution of the conflict”, she added.

Talking about some of the specific questions about the Board’s approval of Pakistan’s programme, she said that the IMF Executive Board approved Pakistan’s EFF programme in September of 2024. And the first review at that time was planned for the first quarter of 2025.

And consistent with that timeline, on March 25th of 2025, the IMF staff and the Pakistani authorities reached a Staff-Level Agreement on the First Review for the EFF. That agreement, that Staff-Level Agreement, was then presented to the Executive Board, and the Executive Board completed the review on May 9th. As a result of the completion of that review, Pakistan received the disbursement at that time.

Copyright Business Recorder, 2025