### India Raises Concerns Over IMF Support for Pakistan Amid Economic Turmoil India has urged the International Monetary Fund (IMF) to reconsider its financial support for Pakistan, citing concerns over the potential misuse of funds for terrorism financing. This comes in the wake of the IMF approving a loan review that unlocked approximately $1 billion for Pakistan, aimed at stabilizing its economy amidst ongoing financial challenges. The situation is further complicated by Pakistan's recent receipt of a second tranche of funding under the Extended Fund Facility (EFF), which is critical for bolstering its foreign exchange reserves and reducing default risks. Meanwhile, Bangladesh is also set to receive $1.3 billion from the IMF as part of a reform deal, highlighting the broader regional economic dynamics at play. ### Breakdown of Current Economic Developments in South Asia 1. **India's Position on Pakistan's IMF Support** - India has formally requested the IMF to reassess its financial assistance to Pakistan, emphasizing concerns regarding the allocation of funds potentially supporting terrorism [https://www.straitstimes.com/asia/south-asia/india-asks-imf-to-reconsider-pakistan-programme-over-terror-funding]. 2. **Pakistan's Financial Situation** - Pakistan has received a second tranche of $1.023 billion from the IMF, which is part of a larger $7 billion loan agreement initiated in September 2024. This funding is crucial for stabilizing the Pakistani rupee and enhancing foreign exchange reserves [https://www.nation.com.pk/15-May-2025/pakistan-receives-dollar-1-23b-imf-2nd-tranche]. - The State Bank of Pakistan confirmed that this tranche will be reflected in its reserves, which currently stand at approximately $15.48 billion [https://www.nation.com.pk/15-May-2025/pakistan-receives-dollar-1-23b-imf-2nd-tranche]. 3. **Bangladesh's IMF Agreement** - Bangladesh is set to receive $1.3 billion from the IMF following successful negotiations on exchange rate reforms. This funding is part of a broader $4.7 billion loan program aimed at stabilizing its economy [https://www.usnews.com/news/world/articles/2025-05-14/bangladesh-to-receive-1-3-billion-from-imf-as-reform-deal-reached]. - The agreement includes commitments to implement a managed floating exchange rate, which is expected to enhance economic stability [https://www.indiatoday.in/world/story/cash-strapped-bangladesh-imf-deal-exchange-deal-reforms-bailout-2724824-2025-05-14]. ### Supporting Data on Financial Disbursements and Economic Impact - **Pakistan's IMF Disbursements:** - Total disbursements under the EFF have reached approximately **$2.1 billion** following the latest tranche [https://www.thehindubusinessline.com/news/world/pakistan-receives-second-imf-tranche-of-102-billion/article69574361.ece]. - The funds are intended to bolster fiscal stability and support external financial buffers amid ongoing economic reforms [https://www.nation.com.pk/14-May-2025/pakistan-receives-dollar-1bn-imf-tranche-under-extended-fund-facility]. - **Bangladesh's Financial Outlook:** - The upcoming $1.3 billion disbursement is part of a larger strategy to address economic challenges, with previous installments totaling **$2.3 billion** already received [https://www.hindustantimes.com/world-news/bangladesh-to-secure-1-3-billion-from-imf-in-june-after-new-exchange-rate-deal-101747228687256.html]. ### Conclusion: Regional Economic Stability at Stake In summary, the economic landscape in South Asia is currently marked by significant financial maneuvers involving the IMF, with both Pakistan and Bangladesh receiving critical support to stabilize their economies. However, India's concerns regarding Pakistan's use of IMF funds for potential terrorism financing add a layer of complexity to the situation. 1. **India's Request:** India has formally asked the IMF to reconsider its support for Pakistan due to terrorism concerns [https://www.straitstimes.com/asia/south-asia/india-asks-imf-to-reconsider-pakistan-programme-over-terror-funding]. 2. **Pakistan's Financial Aid:** Pakistan has received $1.023 billion from the IMF, crucial for its economic stability [https://www.nation.com.pk/15-May-2025/pakistan-receives-dollar-1-23b-imf-2nd-tranche]. 3. **Bangladesh's Reform Deal:** Bangladesh is set to receive $1.3 billion from the IMF as part of a reform agreement [https://www.usnews.com/news/world/articles/2025-05-14/bangladesh-to-receive-1-3-billion-from-imf-as-reform-deal-reached]. The interplay of these financial developments will be critical in shaping the economic future of the region.